On September 14, 2001, President Bush declared a “National Emergency by Reason of Certain Terrorist Attacks” on the World Trade Center and the Pentagon. On November 2, 2001, the Office of Personnel Management (OPM) published interim regulations (66 FR 5557) to provide relief to Federal employees who otherwise would have forfeited excess annual leave at the end of the leave year because of their involvement in efforts connected with the national emergency. The interim regulations became effective on December 3, 2001. Many agencies are involved in activities vital to our Nation as a result of the unprecedented events of September 11, 2001, the efforts toward recovery and response, and the continuing threat of further attacks on the United States. As a result, many Federal employees involved in these activities were unable to schedule and use excess annual leave and would have forfeited that leave at the end of the leave year. The interim regulations simplified the restoration of these employees' forfeited annual leave and imposed relaxed time limitations for using restored annual leave.

The 60-day comment period ended on January 2, 2002. We received no formal comments from either agencies or individuals. In informal comments, agency representatives expressed their satisfaction with the regulations. As a result, we believe no changes are necessary in the interim regulations. Therefore, we are adopting as final the interim rule providing that excess annual leave forfeited by employees who were unable to schedule and use their leave due to their involvement in national emergency efforts is deemed to have been scheduled in advance and therefore eligible for restoration.

I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will affect only Federal agencies and employees.

The Office of Management and Budget has reviewed this rule in accordance with Executive Order 12866.

A proposal to amend part 39 of the Federal Aviation Regulations (14 CFR part 39) by superseding (AD) 2000-08-10, Amendment 39-11696 (65 FR 21642, April 24, 2000), that is applicable to General Electric GE90 series turbofan engines was published in the Federal Register on October 10, 2001 (66 FR 51607). That action proposed to modifiy the airworthiness limitations section of the manufacturer's manual and an air carrier's approved continuous airworthiness maintenance program to incorporate additional inspection requirements.

Interested persons have been afforded an opportunity to participate in the making of this amendment. No comments were received on the proposal or the FAA's determination of the cost to the public. The FAA has determined that air safety and the public interest require the adoption of the rule as proposed.

This final rule does not have federalism implications, as defined in Executive Order 13132, because it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the FAA has not consulted with state authorities prior to publication of this final rule.

For the reasons discussed above, I certify that this action (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979); and (3) if promulgated, will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. A final evaluation has been prepared for this action and it is contained in the Rules Docket. A copy of it may be obtained by contacting the Rules Docket at the location provided under the caption ADDRESSES.

FDA is amending its regulations in 21 CFR parts 56, 58, 60, 101, 107, 179, 310, 312, 314, 510, 514, 606, 610, 640, 660, 680, 720, 814, 1020, and 1040 to reflect a change in the removal of the outdated OMB control numbers. We no longer need to publish OMB control numbers in the CFR, because they are now displayed in a separate Federal Register notice announcing OMB approval for the collection of information.

Publication of this document constitutes final action on these changes under the Administrative Procedure Act (5 U.S.C. 553). Notice and public procedure are unnecessary because FDA is merely correcting nonsubstantive errors.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and, under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The catastrophic nature of, and resulting devastation from, the September 11, 2001 attacks on the World Trade Center towers in New York City and the Pentagon in Washington D.C., makes this rulemaking necessary for the protection of national security interests. National security and intelligence officials warn that future terrorist attacks against United States interests are likely. Any delay in making this regulation effective would be contrary to the public interest because immediate action is necessary to protect against the possible loss of life, injury, or damage to property.

On September 11, 2001, both towers of the World Trade Center and the Pentagon were attacked by terrorists. In response to these terrorist acts, heightened awareness and security of our ports and harbors is necessary. To enhance that security the Captain of the Port, Pittsburgh is establishing a temporary security zone.

This security zone includes all water extending 200 feet from the shoreline of the left descending bank on the Ohio River beginning from mile marker 119.0 and ending at mile marker 119.8. This security zone is necessary to protect the public, facilities, and surrounding area from possible acts of terrorism at the PPG Plant. All vessels and persons are prohibited from entering the zone without the permission of the Captain of the Port Pittsburgh or his designated representative.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT)(44 FR 11040, February 26, 1979).

The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10 (e) of the regulatory policies and procedures of DOT is unnecessary. This rule will not obstruct the regular flow of vessel traffic and will allow vessel traffic to pass safely around the security zone and vessels may be permitted to enter the security zone on a case-by-case basis.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This security zone will not have an impact on a substantial number of small entities because this rule will not obstruct the regular flow of vessel traffic and will allow vessel traffic to pass safely around the security zone.

If you are a small business entity and are significantly affected by this regulation please contact Chief Petty Officer Brian Smith, U.S. Coast Guard Marine Safety Pittsburgh, Suite 1150 Kossman Bldg. 100 Forbes Ave. Pittsburgh, PA at (412) 644-5808.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph 34(g), of Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available for inspection or copying where indicated under ADDRESSES.

We did not publish a notice of proposed rulemaking (NPRM) for this regulation. Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing an NPRM, and, under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register . The catastrophic nature of, and resulting devastation from, the September 11, 2001 attacks on the World Trade Center towers in New York City and the Pentagon in Washington DC, makes this rulemaking necessary for the protection of national security interests. National security and intelligence officials warn that future terrorist attacks against United States interests are likely. Any delay in making this regulation effective would be contrary to the public interest because immediate action is necessary to protect against the possible loss of life, injury, or damage to property.

On September 11, 2001, both towers of the World Trade Center and the Pentagon were attacked by terrorists. In response to these terrorist acts, heightened awareness and security of our ports and harbors is necessary. To enhance that security the Captain of the Port, Pittsburgh is establishing a temporary security zone.

This security zone includes all water extending 200 feet from the shoreline of the left descending bank on the Ohio River beginning from mile marker 34.6 and ending at mile marker 35.1. This security zone is necessary to protect the public, facilities, and surrounding area from possible acts of terrorism at the First Energy Nuclear Power Plant. All vessels are prohibited from entering the zone without the permission of the Captain of the Port Pittsburgh.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866 and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not “significant” under the regulatory policies and procedures of the Department of Transportation (DOT) (44 FR 11040, February 26, l979).

The Coast Guard expects the economic impact of this proposal to be so minimal that a full Regulatory Evaluation under paragraph 10(e) of the regulatory policies and procedures of DOT is unnecessary. This rule will not obstruct the regular flow of vessel traffic and will allow vessel traffic to pass safely around the security zone and vessels may be permitted to enter the security zone on a case-by-case basis.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This security zone will not have an impact on a substantial number of small entities because this rule will not obstruct the regular flow of vessel traffic and will allow vessel traffic to pass safely around the security zone.

If you are a small business entity and are significantly affected by this regulation please contact Chief Petty Officer Brian Smith, U.S. Coast Guard Marine Safety Pittsburgh, Suite 1150 Kossman Bldg. 100 Forbes Ave. Pittsburgh, PA at (412) 644-5808.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process. Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we discuss the effects of this rule elsewhere in this preamble.

This rule will not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. It has not been designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

We have considered the environmental impact of this rule and concluded that under figure 2-1, paragraph 34(g), of Commandant Instruction M16475.1D, this rule is categorically excluded from further environmental documentation. A “Categorical Exclusion Determination” is available for inspection or copying where indicated under ADDRESSES.

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This section provides additional information by addressing the following questions:

Section 110 of the Clean Air Act (CAA) requires states to develop air pollution regulations and control strategies to ensure that state air quality meets the national ambient air quality standards established by EPA. These ambient standards are established under section 109 of the CAA, and they currently address six criteria pollutants. These pollutants are: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.

Each state must submit these regulations and control strategies to us for approval and incorporation into the Federally-enforceable SIP.

Each Federally-approved SIP protects air quality primarily by addressing air pollution at its point of origin. These SIPs can be extensive, containing state regulations or other enforceable documents and supporting information such as emission inventories, monitoring networks, and modeling demonstrations.

In order for state regulations to be incorporated into the Federally-enforceable SIP, states must formally adopt the regulations and control strategies consistent with state and Federal requirements. This process generally includes a public notice, public hearing, public comment period, and a formal adoption by a state-authorized rulemaking body.

Once a state rule, regulation, or control strategy is adopted, the state submits it to us for inclusion into the SIP. We must provide public notice and seek additional public comment regarding the proposed Federal action on the state submission. If adverse comments are received, they must be addressed prior to any final Federal action by us.

All state regulations and supporting information approved by EPA under section 110 of the CAA are incorporated into the Federally-approved SIP. Records of such SIP actions are maintained in the Code of Federal Regulations (CFR) at Title 40, Part 52, entitled “Approval and Promulgation of Implementation Plans.” The actual state regulations which are approved are not reproduced in their entirety in the CFR outright but are “incorporated by reference,” which means that we have approved a given state regulation with a specific effective date.

Enforcement of the state regulation before and after it is incorporated into the Federally-approved SIP is primarily a state responsibility. However, after the regulation is Federally approved, we are authorized to take enforcement action against violators. Citizens are also offered legal recourse to address violations as described in section 304 of the CAA.

On August 21, 2000, February 7, 2001, July 23, 2001, and December 27, 2001, we received requests from the Iowa Department of Natural Resources (IDNR) to amend the SIP. The state requested that we approve amendments made to portions of the following rules:

The rules were amended to accomplish a number of changes. For the most part, these amendments are primarily minor changes in wording to rules which are already in the approved SIP. In some instances clarifications and corrections were made. In other instances the rule is updated to align it with changes made in the Federal rule. Finally, updates to a number of references to Federal citations were made. A complete listing of each rule change is contained in the technical support document which is a part of the docket for this action and is available from the EPA contact above.

A few of the rule revisions which may be of interest, however, are mentioned here. Subrule 22.1(1) and paragraph 22.1(1)“c” were amended to allow a true, minor source to begin construction prior to obtaining a permit, subject to certain conditions. Subrule 22.1(2) added additional information which incorporates a notification to IDNR upon request for certain types of emission units falling under a construction permit exemption. This recordkeeping process will ensure that IDNR has access to information on equipment for which certain exemptions are being claimed.

Paragraph 22.1(2)“i” was amended to clarify requirements for those facilities wanting to get credit for emission reductions made as a result of the installation of control equipment. Subrule 22.3(8) adds a provision which requires that IDNR be notified when the ownership of equipment covered by a construction permit changes. This provision will require facilities to keep IDNR informed of who owns equipment covered by a construction permit. Paragraph 22.8(1)“e” was amended to clarify the certification requirement for obtaining a permit by rule for spray booths. Paragraph 22.300(4)“b” was amended to provide clarification to the definition of de minimis emissions and to the record keeping requirements for stationary sources with de minimis emissions.

The state submittals have met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submittals also satisfied the completeness criteria of 40 CFR part 51, appendix V. In addition, as explained above and in more detail in the technical support document which is part of this document, the revision meets the substantive SIP requirements of the CAA, including section 110 and implementing regulations.

We are processing this action as a final action because the revisions make routine changes to the existing rules which are noncontroversial. Therefore, we do not anticipate any adverse comments. Please note that if EPA receives adverse comment on part of this rule and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the CAA. This rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et. seq .).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 3, 2002. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

This section provides additional information by addressing the following questions:

The Clean Air Act Amendments (CAA) of 1990 require all states to develop an operating permits program that meets certain Federal criteria listed in 40 Code of Federal Regulations (CFR) part 70. In implementing this program, the states are to require certain sources of air pollution to obtain permits that contain all applicable requirements under the CAA. One purpose of the part 70 operating permits program is to improve enforcement by issuing each source a single permit that consolidates all of the applicable CAA requirements into a Federally-enforceable document. By consolidating all of the applicable requirements for a facility into one document, the source, the public, and the permitting authorities can more easily determine what CAA requirements apply and how compliance with those requirements is determined.

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in our implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen dioxide, or PM 10 ; those that emit 10 tons per year of any single hazardous air pollutant (HAP) (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of HAPs.

In order for state regulations to be incorporated into the Federally-enforceable Title V operating permits program, states must formally adopt regulations consistent with state and Federal requirements. This process generally includes a public notice, public hearing, public comment period, and a formal adoption by a state-authorized rulemaking body.

Once a state rule, regulation, or control strategy is adopted, the state submits it to us for inclusion into the approved operating permits program. We must provide public notice and seek additional public comment regarding the proposed Federal action on the state submission. If adverse comments are received, they must be addressed prior to any final Federal action by us.

All state regulations and supporting information approved by EPA under section 502 of the CAA are incorporated into the Federally-approved operating permits program. Records of such actions are maintained in the CFR at Title 40, part 70, appendix A, entitled “Approval Status of State and Local Operating Permits Programs.”

Enforcement of the state regulation before and after it is incorporated into the Federally-approved operating permits program is primarily a state responsibility. However, after the regulation is Federally approved, we are authorized to take enforcement action against violators. Citizens are also offered legal recourse to address violations as described in section 304 of the CAA.

We have requested that each permitting authority periodically submit any revised part 70 rules to us for approval as a revision to their approved part 70 program. The purpose for this is to ensure that the state program and Federally-approved program are consistent, current and Federally enforceable.

Consequently, the state of Iowa has requested that we approve a number of revisions to its part 70 rules. In letters dated August 7, 2000, January 29, 2001, and July 18, 2001, the state requested that we approve various revisions to rules 567-22.100 through 567-22.116, 567-22.201, 567-22.203, and 567-22.300.

The rules were amended to accomplish a number of changes. Some amendments were primarily minor changes in wording to rules which were already in the approved program. In some instances clarifications and corrections were made. In other instances the rules were updated to align them with changes made in the Federal rules. Finally, updates to a number of references to Federal citations were made. A complete listing of each rule change is contained in the technical support document which is a part of the docket for this action and which is available from the EPA contact above. A few of the rule revisions which may be of interest, however, are discussed here.

Rule 22.100, definition of “major source,” paragraph “2”: Language added so that fugitive emissions of HAPs are considered in determining whether a stationary source is a major source.

Rule 22.103(2): Language added ozone to the list of insignificant activities that must be included in the Title V operating permit application, and provides clarification by striking reference to the Title V fee, which is not being required for insignificant activities.

Rule 22.106(1): Deleted prior language and added clarifying language as to when the fee is to be paid, what the fee is based on, and the schedule for establishing the fee and the process for establishing the fee.

Rule 22.106(6): Adds a new subrule which exempts sources from the requirement to pay the Title V permit fee until such time as the sources are required to apply for the Title V permits.

Rule 22.106(7): Rule was amended by adopting a new subrule 22.106(7) which added language to clarify that no Title V fee will be calculated for insignificant activities.

Rule 22.300(3)(b) and (c): Rule was amended by removing the eligibility deadline of December 9, 1999, for operating permit by rule for small sources for those sources subject to sections 111 and 112 of the CAA. Previously, these sources had five years from December 9, 1999, to obtain the operating permit by rule.

Rule 22.300(4)(b): Added clarification to the definition of de minimis emissions and to the recordkeeping requirements for stationary sources with de minimis emissions.

Rule 22.300(7): Rule was amended to provide clarification to the recordkeeping requirement for non-de minimis sources.

Our review of the material submitted indicates that the state has amended rules for the Title V program in accordance with the requirements of section 502 of the CAA and the Federal rule, 40 CFR part 70, and met the requirement for a program revision as established in 40 CFR 70.4(i).

We are approving revisions to the Iowa part 70 operating permits program. We are processing this action as a final action because the revisions make routine changes to the existing rules which are noncontroversial. Therefore, we do not anticipate any adverse comments. Please note that if EPA receives adverse comment on part of this rule and if that part can be severed from the remainder of the rule, EPA may adopt as final those parts of the rule that are not the subject of an adverse comment.

Under Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), this final approval is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) the Administrator certifies that this final approval will not have a significant economic impact on a substantial number of small entities because it merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. This rule does not contain any unfunded mandates and does not significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4) because it approves pre-existing requirements under state law and does not impose any additional enforceable duties beyond that required by state law. This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). This rule also does not have Federalism implications because it will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999). This rule merely approves existing requirements under state law, and does not alter the relationship or the distribution of power and responsibilities between the state and the Federal government established in the CAA. This final approval also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) or Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866. This action will not impose any collection of information subject to the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. , other than those previously approved and assigned OMB control number 2060-0243. For additional information concerning these requirements, see 40 CFR part 70. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

In reviewing state operating permits programs submitted pursuant to Title V of the CAA, EPA will approve state programs provided that they meet the requirements of the CAA and EPA's regulations codified at 40 CFR part 70. In this context, in the absence of a prior existing requirement for the state to use voluntary consensus standards (VCS), EPA has no authority to disapprove a state operating permits program for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program, to use VCS in place of a state program that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. The Congressional Review Act, 5 U.S.C. 801 et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective on November 30, 2001.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 3, 2002. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

This Report and Order, adopted December 21, 2001, and released January 15, 2002, will be available for public inspection during regular business hours at the FCC Reference Information Center, Room CY-A257, at the Federal Communications Commission, 445 12th St., SW., Washington, DC 20554. The complete text is available through the Commission's duplicating contractor: Qualex International, Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile 202-863-2898, or via e-mail at qualexint@aol.com.

1. Initial Licensing of Cellular Service in the Gulf of Mexico. The Commission first authorized the provision of cellular service in the Gulf of Mexico in 1983 and licensed two carriers to serve the region in 1985. The original rules allowed the Gulf carriers to operate throughout the GMSA, which extends to the shoreline and, therefore, includes coastal water areas. However, the Gulf carriers were limited to placing their transmitter sites on offshore platforms (predominantly oil and gas drilling platforms) and were prohibited from using land-based transmitters to serve the GMSA. In addition, in order to prevent interference to adjacent land-based cellular systems, the Gulf carriers were required to limit transmitter power from offshore sites to the extent necessary to avoid extending their service area contours over land.

2. The presence of the Gulf licensees placed similar limitations on land-based cellular operations in adjacent coastal areas. Land-based carriers were prohibited by the Commission's rules from extending their service area contours into the GMSA, i.e., beyond the mean high-tide line that defined the service area border, except for de minimis extensions. As a result, land-based carriers seeking to cover shore areas, e.g., to provide comprehensive service along coastal roads and in coastal communities, were unable to site transmitters close to the shoreline without incurring substantial engineering costs to avoid their signals being transmitted over water.

3. From the outset, these rules have caused conflict between the Gulf carriers and adjacent land carriers regarding the provision of service in the Gulf coastal region. Because offshore drilling has not occurred in the Eastern Gulf, these conflicts have occurred almost exclusively in the Western Gulf, particularly in areas where offshore and onshore sites were in close proximity. In some instances, the requirement to avoid encroachment into adjacent service areas has led to gaps in coverage, both on land and over water, because neither Gulf-based nor land-based carriers could extend coverage into these areas without capture of each other's subscriber traffic. In other instances, disputes have arisen over whether particular Gulf or land carriers were improperly extending coverage and capturing subscribers in the adjacent land or Gulf service area.

4. Unserved Area Rules. In 1993, the Commission adopted the Unserved Area Second Report and Order, 57 FR 13646 (April 17, 1992), which established unserved area licensing rules for land-based cellular service. Under these rules, the Cellular Geographic Service Area (“CGSA”) of each cellular system was redefined as the composite contour created by the actual service areas of all cells in the system. See 47 CFR 22.911. The CGSA is the area in which carriers are entitled to protection from interference and from capture of subscriber traffic by adjacent carriers. In addition, areas not within any carrier's CGSA were subject to reclamation by the Commission and licensing as unserved areas. In the Unserved Area Third Report and Order, 57 FR 53446 (November 10, 1992), the Commission extended these rules to cellular service in the Gulf. See Amendment of Part 22 of the Commission's Rules to Provide for Filing and Processing of Applications for Unserved Areas in the Cellular Service and to Modify Other Cellular Rules, CC Docket 90-6, Third Report and Order and Memorandum Opinion and Order on Reconsideration, 57 FR 53446 (November 10, 1992). As a result, the Gulf carriers' service areas no longer comprised the entire GMSA, but were now limited to areas in the Gulf that received actual coverage from an offshore platform-based cell site. This caused portions of the Gulf that were outside the coverage area of any offshore cell site to be redefined as “unserved” areas, which could not be served by the Gulf carriers without further application and licensing.

5. PetroCom Remand. In the PetroCom decision, the D.C. Circuit reversed and remanded certain aspects of the unserved area rules as they applied to the Gulf. See Petroleum Communications, Inc. v. FCC, 22 F.3d 1164 (D.C. Cir. 1994) (PetroCom). The Court found that the Commission had failed adequately to consider the distinctive nature of Gulf-based service, which relied on movable drilling platforms for placement of cell sites, in comparison to land-based service, which used stationary sites. The Court stated that, while it did not foreclose the possibility of a convincing rationale for applying a uniform standard to both Gulf and land-based licensees, the Commission had failed adequately to justify the decision in the Unserved Area proceeding to treat Gulf licensees in the same manner as land-based cellular licensees in light of their reliance on transitory sites. The Court remanded the issue and instructed the Commission to vacate the rule that defined the Gulf carriers' CGSAs based on their areas of actual service. The effect of the remand was the restoration of the service area of the Gulf carriers as the entire GMSA, regardless of the location of their platform-based cell sites.

6. Second Further NPRM Proposal. Following the PetroCom decision, the Commission issued the Second Further NPRM, in which it initiated a comprehensive reexamination of the cellular service rules for the Gulf. See Cellular Service and Other Commercial Mobile Radio Services in the Gulf of Mexico, Amendment of Part 22 of the Commission's Rules to Provide for Filing and Processing of Applications for Unserved Areas in the Cellular Service and to Modify Other Cellular Rules, WT Docket No. 97-112 and CC Docket No. 90-6, Second Further NPRM, 65 FR 24168 (April 25, 2000). Specifically, the Commission proposed dividing the GMSA into a Coastal Zone and an Exclusive Zone. Under this proposal, the Coastal Zone would consist of the portion of the GMSA extending from the coastline of the Gulf of Mexico to the twelve-mile offshore limit, while the Exclusive Zone would extend from the twelve-mile limit to the southern boundary of the GMSA. In the Exclusive Zone, the two existing Gulf carriers would be able to move their offshore transmitters freely and to expand or modify their systems without being required to file additional applications, obtain prior Commission approval, or face competing applications for the right to serve the territory. In the Coastal Zone, the Commission proposed to apply its Phase II unserved area licensing rules. Thus, within the Coastal Zone, any qualified applicant (including both Gulf- and land-based carriers) would be permitted to apply to serve unserved areas, and all mutually exclusive applications would be subject to competitive bidding procedures.

7. Comments and Carriers' Proposals. While commenting land carriers generally support the Commission's proposal to bifurcate the GMSA into a Coastal Zone and Exclusive Zone, most oppose its proposal to use cellular unserved area licensing rules to award licenses in the Coastal Zone. Instead, many of the land-based carriers support a proposal by ALLTEL to treat the Coastal Zone as a “buffer zone” extending twelve miles out to sea from the Gulf coastline. Within this buffer zone, ALLTEL proposes that Gulf and land carriers could freely extend their SABs and overlap contours, subject to mandatory frequency coordination, but without protection from subscriber capture. In the GMSA outside the buffer zone, Gulf carriers would be fully protected from interference.

8. A second alternative proposal has been advanced by PetroCom, the A-side Gulf licensee, and US Cellular, an adjacent land-based licensee in certain markets. PetroCom and US Cellular propose a bifurcated approach in the Eastern and Western Gulf. In the Eastern Gulf, they would redraw the GMSA boundary ten miles seaward from the shoreline, thus allowing land-based carriers in Florida to expand their coverage over water to that extent. In the Western Gulf, this proposal would retain the existing GMSA boundary along the coastline, and for a period of five years would prohibit either side from expanding over that boundary without the other carrier's consent. A carrier, however, would be allowed to use a higher effective radiated power than that resulting from the Commission's SAB formula, based on measurement data demonstrating equal signal strengths at the coastline. The resulting SAB extensions, however, would not be included as part of the other carrier's CGSA. After five years, their proposal would allow a land carrier to serve portions of the Gulf from land without consent from the Gulf carrier, so long as the latter was not serving that area, but the Gulf carrier would have the right to “reclaim” the area if a new or relocated drilling platform enabled it to provide service. PetroCom and US Cellular also propose that pending, non-mutually exclusive Phase II applications to serve coastal waters be granted.

9. Coastel, the B-side Gulf carrier, argues that the current rules are sufficient to meet the Commission's objectives, and therefore proposes that the Commission terminate this rulemaking without adopting new rules. According to Coastel, the Gulf carriers have substantially expanded their coverage of the Gulf in recent years, eliminating gaps in coverage and providing more reliable service to coastal waters in the Gulf. Coastel contends that this change in circumstances obviates the need for further rulemaking, and further argues that the Commission's proposals in the Second Further NPRM would not reduce conflict because many issues would still remain to be resolved between carriers.

10. The Commission finds that the record in this proceeding demonstrates that different approaches toward the Eastern and Western Gulf are warranted. The development of cellular service has followed different paths in these two areas, which justifies treating them differently so as to spur the development of reliable service where needed, minimize the disturbance to current operations and contractual arrangements, and address the issues raised in the PetroCom remand.

11. As noted above, the circumstances with respect to the Gulf carriers' current service to and ability to serve the coastal areas vary greatly between the Eastern and Western Gulf. Unlike the Western Gulf, where the Gulf carriers have substantial offshore operations, the Eastern Gulf has no offshore oil or gas drilling platforms, and consequently, the Gulf carriers have no offshore base stations from which to provide service in the coastal waters off Florida. The record also indicates no likelihood of such platforms being constructed in the Eastern Gulf any time in the near future. The Commission agrees with PetroCom and US Cellular that, in light of these circumstances, there is a basis to differentiate between its approach to the Eastern Gulf and the Western Gulf.

12.The Commission concludes that, in the Eastern Gulf, the best way to ensure that seamless cellular service is provided “ both on land and in coastal waters—is to adopt its proposal to create a Coastal Zone along the eastern portion of the GMSA. The current positioning of the eastern GMSA boundary directly along the Florida coastline does not accomplish this because it requires land carriers to engineer their systems to limit signal strength along the coast so as to avoid extending their coverage over water. Moreover, § 22.911(d)(2)(i) requires a land-based carrier in Florida to obtain the consent of the Gulf carrier to extend coverage over water, even though the Gulf carriers have no cellular facilities to serve Florida coastal waters.

13. Establishing a Coastal Zone in the Eastern Gulf will improve cellular service to coastal areas by providing an opportunity for land-based carriers to extend their service area contours into territorial coastal waters, which will in turn enable them to add cell sites close to shore and to increase signal strength, thereby improving the reliability of service, from existing sites. This will not only lead to improved coverage of coastal communities, beach resorts, and coastal roads, but will also facilitate service to coastal boat traffic operating close to shore that can be served from land-based transmitters.

14. The remainder of the Eastern Gulf that is not included in the Coastal Zone, along with the entire Western Gulf, will be designated as the Gulf of Mexico Exclusive Zone. In this area, as proposed in the Second Further NPRM, the Gulf carriers will have the unrestricted and exclusive right to operate cellular facilities. The Gulf carriers will also have the flexibility to add, remove, modify, or relocate sites in the Exclusive Zone without notice to or approval by the Commission.

15. In the Second Further NPRM, the Commission proposed that the Coastal Zone would be coextensive with the territorial waters of the United States, a maritime zone that extends approximately twelve nautical miles from the U.S. coastline. The Commission concludes that the territorial water limit will serve as an appropriate boundary between the Coastal Zone and the Exclusive Zone in the Eastern Gulf. This approach is also consistent with the approach the Commission has taken more recently in established services where it has provided for licensing in the Gulf. In the context of WCS, the Commission drew the boundary between land-based operations and Gulf-based operations at the territorial water limit. See Amendment of the Commission's Rules to Establish Part 27, the Wireless Communications Service, Report and Order, 62 FR 09636 (March 3, 1997). Therefore, the Commission defines the Eastern Gulf Coastal Zone as the portion of the Gulf that is bounded by a line extending approximately twelve nautical miles due south from the coastline boundary of the States of Florida and Alabama, and continuing along the west coast of Florida at a distance of approximately twelve nautical miles from the shoreline. A map setting out the coordinates of the Eastern Gulf Coastal Zone is attached at Appendix A.

16. The Commission believes that the most advisable course for licensing the Eastern Gulf Coastal Zone will be to define the region as unserved area. This will enable all entities to apply to serve areas of the Coastal Zone that are not currently served. Accordingly, the Commission will begin accepting Phase II unserved area applications to serve portions of the Coastal Zone sixty days after the effective date of the rules. Further, in the event of mutually exclusive applications, use of the Commission's unserved area competitive bidding rules will ensure that the authorization to serve a given area is awarded to the carrier that values it most and will help maximize the use of the spectrum. Carriers who apply to serve portions of the Eastern Gulf Coastal Zone will be required, consistent with the Commission's rules for terrestrial unserved areas, to construct facilities in these areas within one year from the date of receiving approval to serve this area.

17. The Commission recognizes that as a result of its decision to apply unserved area licensing rules to the Eastern Gulf Coastal Zone, the Gulf carriers will no longer have the exclusive right to serve Florida coastal waters as part of the GMSA. The Commission concludes, however, that the above-described public interest benefits of this course outweigh the costs. Because the Gulf carriers have no operations in the Eastern Gulf, this decision will not result in any reduction in cellular service or stranded investment in cellular facilities by the Gulf carriers. Moreover, given the lack of existing or planned installation of offshore platforms in the Eastern Gulf Coastal Zone, there is no likelihood that the Gulf carriers would be in a position to provide service there in the foreseeable future. Nonetheless, the Commission's decision does not preclude the Gulf carriers from seeking to provide service in the Coastal Zone in conformity with the unserved area licensing rules the Commission is adopting for this region, either from land-based sites or from offshore platforms, at any point in the future should they become available.

18. Finally, the Commission notes that some land-based carriers in Florida have previously-granted de minimis extensions extending into the GMSA. The creation of the Eastern Gulf Coastal Zone is not intended to limit the scope of existing cellular operations, and the Commission therefore grandfathers all existing de minimis extensions of land carriers in the Eastern Gulf Coastal Zone. However, if a land carrier wishes to incorporate the area within an existing de minimis extension into its CGSA, it must file an unserved area application. In addition, carriers who are currently operating on the Florida coast under Special Temporary Authorization must file an unserved area application if they wish to operate on a permanent basis.

19. While the Gulf carriers do not have offshore facilities in the Eastern Gulf, they have built an extensive offshore cellular network on oil and gas drilling platforms in the Western Gulf. In substantial portions of the Western Gulf, particularly off the coast of Louisiana, Mississippi, and Alabama, many of these platforms are located only a few miles from shore, enabling the Gulf carriers to extend coverage to the coastline.

20. The close proximity of these water-based sites to the coastline has given rise to technical and operational conflicts between the Gulf carriers seeking to provide service in coastal waters and the adjacent land-based carriers seeking to provide service to coastal communities, resorts, beaches, and coastal roads. In areas where land and water-based sites are close to one another, Gulf and land carriers must reduce their respective signal strength near the coastline in order to avoid incursions into their counterparts' markets. Some land-based carriers contend that the requirement to limit signal strength has led to gaps in their coverage along the coast, and that the Gulf carriers refuse to consent to SAB extensions into the Gulf that are needed to allow the land-based carriers to provide seamless service on land. The Gulf carriers dispute this characterization, and contend that it is the land-based carriers who are preventing them from providing ubiquitous service in the Gulf.

21. In addition, both Gulf and land carriers accuse one another of improperly extending coverage across the coastline into their counterparts' markets and consequently capturing subscriber traffic that should be served by the home carrier. Some land-based carriers contend that their customers have complained about placing calls on land that were captured by the Gulf carrier's system rather than the land-based system, requiring the customer to pay extremely high roaming charges to the Gulf carrier. The Gulf carriers argue that the land carriers have failed to document these alleged incidents of capture, that such capture is extremely uncommon, and that it is far more common in the Gulf for offshore cellular calls to be captured by land-based systems.

22. In the Second Further NPRM, the Commission proposed to bifurcate the Western Gulf into a Coastal and Exclusive Zone in the same manner that the Commission proposed (and is adopting today) for the Eastern Gulf. The Commission stated that it would grandfather all existing Gulf facilities, but that any unserved area in the Coastal Zone (i.e., area not currently served by the Gulf carrier from an existing offshore drilling platform) would be available for licensing under its cellular unserved area licensing rules. As noted above, commenters generally oppose this proposal, though from different perspectives. Most land carriers, led by ALLTEL, propose that the Coastal Zone should not be subject to unserved area licensing, but should instead be open to both Gulf and land-based carriers on a shared, coordinated basis. PetroCom, with the concurrence of US Cellular, opposes the creation of a Coastal Zone in the Western Gulf, proposing instead that land-based carriers be allowed to expand their SAB contours into unserved portions of the Gulf but also required to pull back if a Gulf carrier sought to serve the area. Coastel opposes the Second Further NPRM proposal and advocates continuing to apply the current rules without modification.

23. In evaluating its proposal and the alternatives presented by commenters, the Commission considers it important to note that circumstances in the Western Gulf appear to have changed significantly since the adoption of the Second Further NPRM. First, in the Second Further NPRM, the Commission expressed concern regarding gaps in coverage of the Western Gulf, and sought to advance a solution that would ensure ubiquitous coverage of coastal waters (whether from land or water-based transmitters) in order to make service available not only to personnel on drilling platforms but also to coastal boat traffic. The record in this proceeding indicates that, in the past few years, the Gulf carriers have substantially expanded their networks and improved their coverage of the Western Gulf. As a result, there appear to be fewer gaps in coverage of coastal waters than there were previously.

24. Second, while there are still significant disputes between Gulf and land-based carriers generally, some Gulf and land carriers have successfully negotiated agreements since the Second Further NPRM that provide a mutually agreed-upon framework for cooperative operation along portions of the Western Gulf coast. In particular, PetroCom, the A-side Gulf carrier, has entered into a series of extension and collocation agreements with US Cellular and several other A-side land-based carriers. These agreements facilitate seamless coverage of coastal areas (over both land and water) and apply negotiated solutions to issues such as coverage, capture, and roaming rates. A similar accord has been negotiated by Coastel, the B-side Gulf carrier, and ALLTEL, the principal B-side land carrier, by which they have reached agreement with respect to their operations along the Alabama coastline, specifically in Mobile Bay.

25. In light of these developments, the Commission believes that the best way to achieve reliable, ubiquitous service in the Western Gulf is to encourage further reliance on negotiation and market-based solutions to the fullest extent possible. The fact that some Gulf- and land-based carriers have reached negotiated agreements suggests that carrier-driven solutions to these issues are possible without substantial changes to existing rules. Moreover, in other instances where negotiations have not been successful, a partial cause may be uncertainty and speculation regarding possible rule changes that could result from this proceeding. Thus, adopting rules that substantially change the relationship between land and Gulf carriers in the Western Gulf could be counter-productive by further delaying negotiated solutions and even leading parties to seek to unwind existing agreements.

26. Therefore, upon review of the record, the Commission concludes that it should not adopt its Second Further NPRM proposal to create a Coastal Zone subject to unserved area licensing rules in the Western Gulf. First, because of the buildout that has occurred in the Western Gulf in recent years, there is relatively little unserved area in what would comprise the Coastal Zone. Second, to the extent that applying unserved area licensing rules would impose a “use or lose” regime on the Gulf carriers ( i.e., a Gulf carrier providing service from an offshore platform could permanently lose the right to serve that portion of the Gulf if the platform were moved out of the area, even if the relocation was not permanent), the Commission is concerned that such a fundamental change in the rules could delay resolution of coverage conflicts and discourage negotiation of extension and collocation agreements between land and Gulf carriers.

27. The Commission similarly declines to adopt the ALLTEL proposal that the Coastal Zone be available for use by both Gulf and land-based carriers on a shared, coordinated basis. Although ALLTEL's proposal is designed to provide a basis for negotiated agreements, implementing it as a formal rule would, in effect, turn the Coastal Zone into a “no-man's land” where the prohibition against capture of a neighboring carrier's subscriber traffic would not apply. Moreover, by eliminating capture protection in a portion of the GMSA while retaining it in the CGSAs of the adjacent land carriers, the effect of the ALLTEL proposal would be to shift the protections afforded by existing rules in favor of the land carriers and against the Gulf carriers. While the Commission has no objection to voluntary agreements along the lines of ALLTEL's proposal, it sees no compelling public interest reason to codify it in its rules, and is concerned that doing so could reduce the incentive for land carriers to negotiate with Gulf carriers regarding traffic capture in the Coastal Zone. In addition, because the ALLTEL proposal does not provide a mechanism for settling frequency coordination disputes, there is a substantial likelihood that the Commission would be burdened with resolving such matters in instances where frequency coordination failed.

28. The Commission concludes that the wisest course is to designate a Gulf of Mexico Exclusive Zone by generally maintaining the currently applicable rules and continuing to encourage carriers to resolve their differences through negotiated agreements. Specifically, the Commission identifies the GMSA area west of the Eastern Gulf Coastal Zone as part of the Gulf of Mexico Exclusive Zone, which will reach landward up to the land-water boundary in the western portion of the Gulf. In reaching this conclusion, the Commission does not agree with Coastel's position that no revisions to the rules are required. However, the Commission believes that, with relatively minor modifications, the current rules should provide sufficient incentives for both Gulf and land carriers to negotiate agreements that lead to seamless cellular coverage in coastal areas at competitive rates.

29. Accordingly, in the Western Gulf, the Commission will maintain the GMSA border at the coastline as currently defined in its rules, and will allow the Gulf carriers to provide service throughout the Gulf of Mexico Exclusive Zone regardless of the location of their cell sites at any particular time. Thus, Gulf carriers will not be subject to a “use or lose” regime based on the movement of offshore drilling platforms. The Commission notes that this approach addresses the concern expressed by the court in PetroCom that the Commission's rules for the Gulf carriers take into account the transitory nature of water-based transmission sites. The Commission's decision gives the Gulf carriers full flexibility to build, relocate, modify and remove offshore facilities throughout the Western Gulf without seeking prior Commission approval or facing competing applications.

30. In the Second Further NPRM, the Commission noted that, although under its proposal only the Gulf carriers would have exclusive rights within the Exclusive Zone, the Commission tentatively concluded that de minimis extensions into unserved areas in the GMSA Exclusive Zone should be permitted. Upon further consideration of the proposal, however, the Commission does not believe it is necessary to permit de minimis extensions into the Exclusive Zone in light of the ability of the land-based and Gulf carriers to enter into agreements regarding their operations. In instances where it is necessary for a carrier to extend into an adjacent carrier's licensed area, the record reflects that contract extensions ( i.e. where the Gulf and land licensees mutually agree to the extension) are sufficient to ensure reliable coverage.

31. The Commission recognizes that the rules it is adopting for the Western Gulf cannot resolve all of the technical and operational conflicts ( e.g., interference, subscriber capture) that have arisen in areas where Gulf carriers and land carriers operate in close proximity to one another. Ultimately, only negotiation and cooperative arrangements between land and Gulf-based carriers can resolve these conflicts. Nonetheless, because the Commission's decision provides finality regarding its licensing and operational rules, the Commission expects that it will facilitate and speed the progress of such negotiations. The Commission emphasizes that under its decision today, parties remain free to negotiate consensual agreements that provide for extensions, coordination of frequencies, collocation, facilities sharing, or other solutions, so long as such agreements do not affect the rights of third parties. Thus, nothing in the decision is intended to modify or alter the effect of the existing agreements that have been negotiated by PetroCom or Coastel with adjacent land-based carriers. The Commission encourages Gulf and land-based carriers who have not reached negotiated agreements to enter into negotiations that could result in such agreements.

32. In seeking to facilitate negotiated agreements, it is the Commission's goal to create incentives for carriers to reach agreements that are not only mutually beneficial, but that also benefit existing and potential cellular subscribers. For example, while the Commission recognizes that the operating costs of Gulf carriers are typically higher than those of land-based carriers, the Commission seeks to ensure that they cannot recover those costs by charging uncompetitive rates or roaming charges to their customers, including the numerous land-based subscribers who may roam onto a Gulf carrier's network when close to the coastline ( e.g., recreational boaters). The Commission believes that the rules it adopts will help to foster a competitive marketplace in the Gulf that will protect consumers from such charges and practices. The Commission notes, for example, that some of the recently negotiated agreements between Gulf and land-based carriers provide for “in-shore” roaming rates that are comparable to roaming rates on land as opposed to the higher rates that PetroCom charges roamers operating significantly further out to sea. This creates a competitive incentive for similar terms to be negotiated in future agreements also. Moreover, the deployment of non-cellular services such as PCS along the Gulf coast will apply pressure on both cellular providers in the Gulf, and their land-based counterparts, to offer competitive services and rates.

33. In the Unserved Area Second Report and Order, the Commission applied the standard land-based SAB formula to operations by land carriers along the Gulf coast (“land formula”), but adopted a separate mathematical formula to define the SABs of facilities operated by the Gulf carriers from offshore sites (“water formula”) in the Unserved Area Third Report and Order. The use of different formulas recognized that cellular signals transmitted over water typically have stronger propagation characteristics ( i.e., can be received at greater distances from the transmitter) than comparable signals transmitted over land, which are attenuated by variations in terrain, buildings, trees, and other obstacles. The two SAB formulas also incorporated different assumptions regarding receivers: the land formula determined the distance to the service area boundary that results in reliable service to a conventional mobile unit, while the water formula established the distance to the service area boundary that results in reliable service to a marine mobile unit with a mast-mounted antenna. In the Second Further NPRM, the Commission sought comment on whether to retain the two-formula approach or to adopt an alternative “hybrid” approach that would account for signals in the Gulf coastal region that are transmitted over both land and water.

34. The Commission will continue to use the two existing SAB formulas for land and water-based sites, respectively. While no mathematical formula can precisely duplicate actual signal propagation in all circumstances, the Commission concludes that the two-formula approach adequately accounts for the different characteristics of signal propagation over land and water. In addition, the record reflects little support for a hybrid formula, and the Commission finds that it would be difficult to establish such a formula that would account for the variation in propagation of a single signal over both land and water. Finally, retaining the existing SAB formulas is consistent with the Commission's overall decision to maintain the existing relationship between land and Gulf carriers in the Western Gulf as the basis for negotiated solution of their operational conflicts. The Gulf carriers have been using the water formula to depict SAB contours for their facilities operating in the Gulf since the formula was adopted, while the land carriers have used the land-based formula for their facilities. Consequently, changing the SAB definitions at this point could lead to one side or the other unilaterally increasing their transmitter power under the revised definitions, which could upset existing agreements and create new conflicts. Of course, this does not preclude parties from entering into voluntary agreements that would allow for consensual transmitter power adjustments based on alternative contour definitions.

35. When the Commission initially licensed carriers to provide cellular service in the Gulf, it did not prohibit them from placing sites on land, but required Gulf carriers to avoid causing significant overlap of their reliable service area contours with land-based licensees. Subsequently, the Commission determined that allowing Gulf carriers to place transmitters on land would cause significant incursions over land and hamper the ability of land-based MSA and RSA licensees to carry out the initial build out of their systems. Thus the Commission concluded that Gulf carriers should not be permitted to place transmitters on land without the consent of the affected land-based carrier.

36. In the Second Further NPRM, the Commission observed that the land-based licensees along the Gulf coast have built out their cellular systems to encompass nearly the entire coastal land area of the Gulf region, and tentatively concluded that it was no longer necessary to prohibit Gulf carriers from siting on land, so long as no overlap with any land-based carrier's CGSA occurred. The Commission therefore proposed to abandon its blanket prohibition against Gulf carriers placing their transmitters on land, and proposed to rely solely on its CGSA and SAB extension rules to determine whether or not the placement of a particular transmitter was permissible. See 47 CFR 22.912. In light of the course the Commission now takes, the Commission believes that it is appropriate to adopt this part of the proposal from the Second Further NPRM and permit Gulf carriers to operate land-based sites, subject to SAB extension rules as discussed above. The Commission believes that this additional flexibility will help facilitate contractual resolutions of the issues facing adjacent carriers along the Gulf of Mexico.

37. In December 1992, following its adoption of cellular unserved area licensing rules applicable to the Gulf, the Commission accepted Phase II applications for unserved area licenses in the GMSA. Many of these applications were petitioned against by the Gulf carriers. In addition, PetroCom filed a Phase II application that remains pending. However, following the PetroCom remand of the unserved area rules as they applied to the GMSA, the Commission suspended processing of these applications pending reconsideration of its policies in the Gulf region. In the Second Further NPRM, the Commission proposed that areas of the Coastal Zone that do not receive cellular service be treated as unserved areas and that Phase II competitive bidding procedures should be implemented for those areas. The Commission further proposed that all unserved area applications previously filed to serve Coastal Zone areas would be dismissed without prejudice, and that applicants would be allowed to resubmit their applications sixty days after the effective date of this rulemaking.

38. In light of its actions set out here, the Commission will dismiss all pending Phase II applications and associated petitions to deny. In both the Western Gulf, where the Commission has decided not to apply unserved area licensing procedures, and the Eastern Gulf, where the Commission is instituting unserved area licensing in the Coastal Zone, the Commission will allow carriers to refile to the extent allowed under the new rules adopted in this Report and Order. In light of the passage of several years since the applications were filed, the Commission concludes that dismissing applications filed under superseded rules and allowing carriers currently serving or desiring to serve the Eastern Gulf Coastal Zone to submit new applications is the fairest and most efficient manner to license cellular service in that region.

39. Following the PetroCom remand, the Commission also suspended processing of applications for de minimis extensions into the Gulf. In the Second Further NPRM, the Commission proposed to dismiss all such pending applications because the PetroCom court directed us to vacate former § 22.903(a) to the extent that it applied to the Gulf carriers, and because virtually all applications for contour extensions were subject to petitions to deny and applications for review. The Commission also noted that pending applicants would not be prejudiced by a dismissal of extension applications, because such applicants would have the opportunity to resubmit applications under the Commission's revised licensing rules for unserved areas in the Gulf.

40. Based on the actions the Commission takes in the Report and Order, the Commission will dismiss all pending extension applications and allow carriers to refile to the extent permissible under the rules the Commission adopts in this Report and Order. The Commission concludes that dismissal is the more equitable course in light of the passage of time since the applications were filed and the fact that the rules under which they were filed have undergone some modification.

41. In the Second Further NPRM, the Commission requested comment regarding possible operations in the Gulf by CMRS licensees in services other than cellular. Specifically, the Commission asked whether the Commission should establish a Gulf licensing area, analogous to the cellular GMSA, for use in other CMRS services and, if such a licensing area were established, where the boundary should lie between it and the adjacent licensing areas of land-based CMRS providers. The Commission received only limited comment on the issue of licensing such services in the Gulf. Stratos Offshore Services Company (“Stratos”), which operates a microwave network that supports communications in the Gulf, generally supports creating a license area for the non-cellular services to protect licensees operating in the Gulf. Stratos, however, does not support licensing PCS in the Gulf because of the high cost of relocating microwave networks operating at 2 GHz. On the other hand, DW Communications, a 900 MHz operator with at least one license along the Gulf coast, argues that creating Gulf area licenses in other services would create more problems than would be solved. PCS licensees Sprint PCS and Verizon Wireless each argue that the Commission's PCS service area rules define boundaries based on county lines, which, under state law, extend into the Gulf's offshore areas, and therefore, the Commission should not create a separate license area for PCS in the Gulf.

42. Since the issuance of the Second Further NPRM, the Commission has established Gulf licensing areas in several other services, including Wireless Communications Service (“WCS”), Multiple Address Systems (MAS), 746-747/776-777 and 762-764/792-794 MHz bands (“700 MHz Guardband”), 24.25-24.45 GHz and 25.05-25.25 GHz bands (“24 GHz”), and the 746-764 MHz and 776-794 MHz bands (“700 MHz”). In the case of WCS, the Commission incorporated United States territorial waters in the Gulf, i.e., waters from the shoreline to a line 12 nautical miles offshore, into the adjacent land-based licensing areas. Thus, the WCS licensing area, unlike the original cellular GMSA, extends seaward from the 12-mile limit, and includes coastal waters. For 700 MHz, the Commission established Economic Area Groupings (EAGs) whereby the Gulf of Mexico is divided in two, with the eastern portion being included in the license for Southeast EAG, and the western portion being included in the license for the Central/Mountain EAG.

43. With respect to non-cellular CMRS services, the Commission concludes that it should not create a Gulf licensing area in this proceeding for all such services, but instead should take up the issue of establishing a Gulf licensing area on a service-by-service basis, as it did for WCS, MAS, 24 GHz, 700 MHz Guardband, and 700 MHz. The dearth of support in this proceeding advocating creation of Gulf licensing areas suggests that there is limited interest among carriers in many non-cellular CMRS services in providing service to offshore drilling facilities analogous to that provided by the Gulf cellular carriers. Furthermore, to the extent that carriers in a particular service may wish to establish a Gulf licensing area for that service, it can address such issues separately, taking into account the specific characteristics of that service.

44. On the other hand, land-based carriers in services that have no service provider licensed in the Gulf have expressed significant interest in the Commission clarifying whether they can extend their coverage offshore from land-based sites. The Commission finds that in those services where there is no licensed carrier in the Gulf, it is in the public interest to allow land-based CMRS carriers to extend their coverage offshore, both to increase coverage and service quality for land-based customers along the coastline and to offer service to coastal boating traffic. In general, the geographic service area definitions used for non-cellular CMRS services are based on county boundaries, which extend over water pursuant to state law. The Commission therefore clarifies that the licensing areas of land-based licensees in such services extend to the limit of county boundaries that extend over water. In addition, licensees may provide service extending further into the Gulf on a secondary basis so long as they comply with the technical limitations applicable to the radio service and do not cause co-channel or adjacent channel interference to others.

45. Finally, PetroCom has filed a petition for rulemaking with respect to establishment of special interference criteria for Gulf-based facilities. Although the Commission has never adopted specific rules for licensing of water-based SMR facilities, the Commission has issued some site-specific SMR licenses to PetroCom for sites in the Gulf. Under the existing SMR rules, these sites are entitled to interference protection on the same basis as site-specific licenses on land. In its petition, PetroCom sought to change the interference protection rules for site-based SMR facilities in the Gulf, arguing that the land-based rules did not adequately protect its water-based facilities. The Commission incorporated PetroCom's petition into the Second Further NPRM and sought comment on it. However, the Commission received only limited comment on issues relating to Gulf-based SMR facilities. Moreover, since the Second Further NPRM, the Commission has issued land-based EA licenses in the 800 MHz SMR service, and have received no indication that the operations of these licensees have caused interference to Gulf-based SMR facilities. The Commission concludes that in light of these circumstances, the record before us does not support amending the existing SMR rules as they apply to service in the Gulf, and the Commission therefore denies PetroCom's petition. However, PetroCom or any other party is free to file an updated petition for rulemaking if it believes that current or potential circumstances warrant revision of the SMR rules to protect the operation of Gulf-based facilities.

46. The Commission concludes this reevaluation of its Gulf cellular rules by finding that the carriers themselves are best able to resolve most of the issues standing in the way the provision of reliable, ubiquitous cellular coverage to both land-based and Gulf-based subscribers in the Gulf region. The imposition of a new regulatory structure would cause additional and unnecessary delay in meeting this goal. In addition, the record reflects that a number of carriers have been able to resolve their differences under the current rules. The Commission believes the few changes it now makes help to strike a fair balance between the interests of the carriers, the interest of the public, and the need for flexibility to deal with these issues.

47. As required by the Regulatory Flexibility Act of 1980, 5 U.S.C. 604 (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the Second Further NPRM. The Commission sought written public comment on the proposals in the Second Further NPRM, including comment on the IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

48. In this Report and Order , the Commission resolves certain issues raised in the Second Further NPRM in this proceeding, in which the Commission proposed changes to its cellular service rules for the Gulf of Mexico Service Area (GMSA). This decision also responds to the remand by the United States Court of Appeals for the District of Columbia Circuit in the PetroCom . In the PetroCom decision, the D.C. Circuit reversed and remanded certain aspects of the unserved area rules as they applied to the Gulf. The Court found that the Commission had failed adequately to consider the distinctive nature of Gulf-based service, which relied on movable drilling platforms for placement of cell sites, in comparison to land-based service, which used stationary sites. The Court stated that, while it did not foreclose the possibility of a convincing rationale for applying a uniform standard to both Gulf and land-based licensees, the Commission had failed to adequately justify the decision to treat Gulf licensees in the same manner as land-based cellular licensees in light of their reliance on transitory sites. The Court remanded the issue and instructed the Commission to vacate the rule that defined the Gulf carriers' Cellular Geographic Service Areas (CGSA) based on their areas of actual service. The effect of the remand was the restoration of the original rules that defined the service area of the Gulf carriers as the entire GMSA, regardless of the location of their platform-based cell sites. In this Report and Order , the Commission adopts a bifurcated approach to cellular licensing in the Gulf, based on the differences between the deployment of cellular service in the Eastern Gulf (the Florida Gulf coast) and the Western Gulf (the Texas, Louisiana, Mississippi, and Alabama Gulf Coast). In the Eastern Gulf, where there are no offshore oil and gas drilling platforms on which to site cellular facilities, the Commission adopts its proposal to establish a Coastal Zone in which its cellular unserved area licensing rules will apply. In the Western Gulf, the Commission finds that the extensive deployment of both Gulf-based and land-based facilities that has occurred in the past few years makes adoption of its Second Further NPRM proposal impractical. Instead, the Commission concludes that cellular service in the Western Gulf should continue to be governed by current rules, with certain modifications to facilitate negotiated solutions to ongoing coverage conflicts between Gulf-based and land-based carriers. Accordingly, the Commission establishes the Gulf of Mexico Exclusive Zone, encompassing the Western Gulf and areas of the Eastern Gulf outside of the Coastal Zone, in which the Gulf carriers will have the exclusive right to operate.

49. The Second Further NPRM also requested comment regarding possible operations in the Gulf by Commercial Mobile Radio Services (CMRS) licensees for services other than cellular. Given the limited comment the Commission received on these issues, it declines to adopt specific licensing and service rules for the provision of non-cellular services in the Gulf at this time. The Commission concludes, however, that the boundaries of non-cellular CMRS markets with market areas that are derived from the aggregation of counties (e.g. Economic Areas, Basic Trading Areas), are coterminous with county boundaries absent specific service rules to the contrary.

50. Although the Commission has received a number of comments in response to the Second Further NPRM , it received only one comment in response to the IRFA. However, as described below, the Commission has nonetheless considered potential significant economic impacts of the rules on small entities.

51. Comments raised in response to the Second Further NPRM regarding proposals that may have an impact on small entities. In response to the Second Further NPRM , the Commission received a number of comments and alternative proposals from land-based and Gulf-based carriers, many of which have been supplemented recently with ex parte presentations. Some commenting land carriers generally support the proposal to bifurcate the GMSA into a Coastal Zone and Exclusive Zone, while most oppose the Commission's proposal to use cellular unserved area licensing rules to award licenses in the Coastal Zone. Many of the land-based carriers support a proposal by ALLTEL to treat the Coastal Zone as a “buffer zone” extending twelve miles out to sea from the Gulf coastline. Within this buffer zone, ALLTEL proposes that Gulf and land carriers could freely extend their service area boundaries (SABs), subject to mandatory frequency coordination, but without protection from subscriber capture. In the GMSA outside the buffer zone, Gulf carriers would be fully protected from interference.

52. A second alternative proposal has been advanced by PetroCom, a Gulf licensee, and US Cellular, an adjacent land-based licensee in certain markets. PetroCom and US Cellular advocate a bifurcated approach in the Eastern and Western Gulf. In the Eastern Gulf, they propose that the Commission extend the GMSA boundary ten miles seaward from the shoreline, thus allowing land-based carriers in Florida to expand their coverage over water to that extent. In the Western Gulf, PetroCom and US Cellular would retain the existing GMSA boundary along the coastline, and for a period of five years would prohibit either side from expanding over that boundary without the other carrier's consent. After five years, their proposal would allow a land carrier to serve portions of the Gulf from land without consent from the Gulf carrier, so long as the latter was not serving that area, but the Gulf carrier would have the right to “reclaim” the area if a new or relocated drilling platform enabled it to provide service.

53. Another commenter, Coastel, argues that the current rules are sufficient to meet the Commission's objectives, and therefore proposes that the Commission terminate this rulemaking without adopting new rules. Coastel asserts that the Gulf carriers have substantially expanded their coverage of the Gulf in recent years, eliminating gaps in coverage and providing more reliable service to coastal waters in the Gulf. Coastel contends that this change in circumstances obviates the need for further rulemaking, and argues that the Commission's proposals in the Second Further NPRM would not reduce conflict because many issues would still remain to be resolved between carriers.

54. With respect to the issue of whether or not to create Gulf of Mexico service areas for non-cellular commercial mobile radio services (CMRS), a few commenters state that customers in the Gulf would benefit from additional CMRS options. Others, however, oppose the creation of additional market areas in the Gulf. Commenters argue that creating Gulf area licenses in other services would create more problems than would be solved. A few commenters assert that incumbent licensees with markets adjacent to the Gulf are already authorized to serve the Gulf's offshore areas.

55. Certain commenters also express concern over the Commission's proposal to dismiss all pending Phase II and de minimis applications. Some commenters object to the dismissing of applications because applicants have spent time and resources to file the applications, and suggest that the Commission process the pending applications instead.

56. Further, the two Gulf carriers argue that they should be permitted to site their transmitters on land. Other commenters argue that such sites should not be permitted, because interference and capture issues will likely arise if Gulf carriers are permitted to locate transmitters on land without the land-based carrier's consent. Commenters also generally oppose the proposal to adopt a “hybrid” propagation approach that would account for signals in the Gulf coastal region that are transmitted over both land and water. Commenters argue that a hybrid formula would be unworkable and expensive.

57. Comment in response to the IRFA. In an ex parte submission filed on August 21, 2001, PetroCom revised its proposal and that of U.S. Cellular for consideration by the Commission as an alternative to the agency's proposed rules in this proceeding pursuant to the RFA. PetroCom contends that it has opposed any changes to the current definition of its CGSA on the Western (non-Florida) side of the Gulf where it has fully built out infrastructure providing cellular service to customers throughout the proposed Coastal Zone, and that such action would adversely impact the proposed Coastal Zone rules. PetroCom states that there is no factual, legal or policy reason to change the current rules that require it's consent to the SAB extensions of land carriers that cross the coastline into it's CGSA.

58. PetroCom asserts that paragraphs 64-72 of the Second Further NPRM violates several RFA requirements. Among its assertions, PetroCom states that the Commission's IRFA does not describe the impact of the proposed Coastal Zone on small entities, and that the Commission failed to describe alternatives to the Coastal Zone as required by the RFA. Further, PetroCom asserts that the Commission failed to provide a small entity impact analysis with respect to the agency's proposal and an analysis of alternatives. Further still, PetroCom calls attention to the Commission's IRFA in the Second Further NPRM , which it avers, contained no discussion or analysis of the 15-day reporting rule that was proposed in paragraph 47 which conflicts with Section 1.947 of the rules that contains a 30-day reporting rule. PetroCom also asserts that the Commission's definition of a small business has not complied with SBA rules.

59. PetroCom states that there is nothing in the record that will support a finding in an FRFA that the creation of a Coastal Zone as proposed in the Second Further NPRM is the best alternative. Further, PetroCom asserts that the alternatives advocated by other carriers ( see infra ) will significantly affect the annual revenues of the Gulf carriers. PetroCom argues that, among the various alternatives, its joint proposal best minimizes adverse impacts on small entities.

60. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. 5 U.S.C. 603(b)(3). The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. 5 U.S.C. 601(3). A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). 15 U.S.C. 632.

61. Cellular Licensees. Neither the Commission nor the SBA has developed a definition of small entities specific to cellular licensees. Therefore, the applicable definition of small entity is the definition under the SBA rules applicable to radiotelephone (wireless) companies. This provides that a small entity is a radiotelephone (wireless) company employing no more than 1,500 persons. 13 CFR 121.201. According to the Census Bureau, only twelve radiotelephone (wireless) firms from a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. Even if all twelve of these firms were cellular telephone companies, nearly all cellular carriers were small businesses under the SBA's definition. In addition, the Commission notes that there are 1,758 cellular licenses; however, a cellular licensee may own several licenses. According to a recent Telecommunications Reporting Worksheet data, 806 wireless telephony providers reported that they were engaged in the provision of either cellular service or Personal Communications Service (PCS) services, and Specialized Mobile Radio (SMR) telephony carriers, which are placed together in the data. The Commission does not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and are unable at this time to estimate with greater precision the number of cellular service carriers that would qualify as small business concerns under the SBA's definition. The Commission estimates that there are fewer than 806 small wireless service providers that may be affected by these revised rules.

62. 220 MHz Radio Service—Phase I Licensees. The 220 MHz service has both Phase I and Phase II licenses. Phase I licensing was conducted by lotteries in 1992 and 1993. There are approximately 1,515 such non-nationwide licensees and four nationwide licensees currently authorized to operate in the 220 MHz band. The Commission has not developed a definition of small entities specifically applicable to such incumbent 220 MHz Phase I licensees. To estimate the number of such licensees that are small businesses, the Commission applies the definition under the SBA rules applicable to Radiotelephone (Wireless) Communications companies. This definition provides that a small entity is a radiotelephone (wireless) company employing no more than 1,500 persons. According to the Census Bureau, only 12 radiotelephone (wireless) firms out of a total of 1,178 such firms which operated during 1992 had 1,000 or more employees. If this general ratio continues in 2001 in the context of Phase I 220 MHz licensees, the Commission estimates that nearly all such licensees are small businesses under the SBA's definition.

63. 220 MHz Radio Service—Phase II Licensees. The Phase II 220 MHz service is a new service, and is subject to spectrum auctions. In the 220 MHz Third Report and Order , the Commission adopted criteria for defining small and very small businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. The Commission has defined a small business as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. A very small business is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that do not exceed $3 million for the preceding three years. The SBA has approved these definitions. Auctions of Phase II licenses commenced on September 15, 1998, and closed on October 22, 1998. In the first auction, 908 licenses were auctioned in three different-sized geographic areas: three nationwide licenses, 30 Regional Economic Area Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908 licenses auctioned, 693 were sold. Thirty-nine small businesses won licenses in the first 220 MHz auction. The second auction included 225 licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies claiming small business status won 158 licenses.

64. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order , the Commission adopted criteria for defining small businesses and very small businesses for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. The Commission has defined a small business as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $15 million for the preceding three years. Additionally, a very small business is defined as an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $3 million for the preceding three years. An auction of 52 Major Economic Area (MEA) licenses commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to 9 bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001 and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.

65. Paging. The Commission has adopted a two-tier definition of small businesses in the context of auctioning licenses in the Common Carrier Paging and exclusive Private Carrier Paging services. A small business will be defined as either (1) an entity that, together with its affiliates and controlling principals, has average gross revenues for the three preceding years of not more than $3 million, or (2) an entity that, together with affiliates and controlling principals, has average gross revenues for the three preceding calendar years of not more than $15 million. Because the SBA has not yet approved this definition for paging services, the Commission will utilize the SBA's definition applicable to radiotelephone companies, i.e. , an entity employing no more than 1,500 persons. At present, there are approximately 24,000 Private Paging licenses and 74,000 Common Carrier Paging licenses. According to a recent Telecommunications Industry Revenue data, 172 carriers reported that they were engaged in the provision of either paging or “other mobile” services, which are placed together in the data. The Commission does not have data specifying the number of these carriers that are not independently owned and operated or have more than 1,500 employees, and thus are unable at this time to estimate with greater precision the number of paging carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are fewer than 172 small paging carriers that may be affected by the rules adopted herein. The Commission estimates that the majority of private and common carrier paging providers would qualify as small entities under the SBA definition.

66. Broadband Personal Communications Service (PCS). The broadband PCS spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. For Block F, an additional classification for “very small business” was added and is defined as an entity that, together with their affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. These regulations defining “small entity” in the context of broadband PCS auctions have been approved by the SBA. No small businesses within the SBA-approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40% of the 1,479 licenses for Blocks D, E, and F. On March 23, 1999, the Commission reauctioned 347 C, D, E, and F Block licenses; there were 48 small business winning bidders. On January 26, 2001, the Commission completed the reauction of 422 C and F Block licenses. Of the 35 winning bidders, 30 were small business entities. Based on this information, the Commission concludes that there are approximately 261 small entity broadband PCS providers as defined by the SBA and the Commission's auction rules.

67. Narrowband PCS. The Commission has auctioned nationwide and regional licenses for narrowband PCS. There are 11 nationwide and 30 regional licensees for narrowband PCS. The Commission does not have sufficient information to determine whether any of these licensees are small businesses within the SBA-approved definition for radiotelephone companies. At present, there have been no auctions held for the major trading area (MTA) and basic trading area (BTA) narrowband PCS licenses. The Commission anticipates a total of 561 MTA licenses and 2,958 BTA licenses will be awarded by auction. Such auctions have not yet been scheduled, however. Given that nearly all radiotelephone companies have no more than 1,500 employees and that no reliable estimate of the number of prospective MTA and BTA narrowband licensees can be made, the Commission assumes, for purposes of this IRFA, that all of the licenses will be awarded to small entities, as that term is defined by the SBA.

68. Specialized Mobile Radio (SMR). Pursuant to 47 CFR 90.814(b)(1), the Commission has defined “small business” for purposes of auctioning 900 MHz SMR licenses, 800 MHz SMR licenses for the upper 200 channels, and 800 MHz SMR licenses for the lower 230 channels on the 800 MHz band as a firm that has had average annual gross revenues of $15 million or less in the three preceding calendar years. The SBA has approved this small business size standard for the 800 MHz and 900 MHz auctions. Sixty winning bidders for geographic area licenses in the 900 MHz SMR band qualified as small businesses under the $15 million size standard. The auction of the 525 800 MHz SMR geographic area licenses for the upper 200 channels began on October 28, 1997, and was completed on December 8, 1997. Ten (10) winning bidders for geographic area licenses for the upper 200 channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard.

69. The auction of the 1,030 800 MHz SMR geographic area licenses for the General Category channels began on August 16, 2000, and was completed on September 1, 2000. Eleven (11) winning bidders for geographic area licenses for the General Category channels in the 800 MHz SMR band qualified as small businesses under the $15 million size standard. The Commission anticipates that a total of 2,823 EA licenses will be auctioned in the lower 80 channels of the 800 MHz SMR service. Therefore, the Commission concludes that the number of 800 MHz SMR geographic area licensees for the lower 80 channels that may ultimately be affected by these proposals could be as many as 2,823. In addition, there are numerous incumbent site-by-site SMR licensees on the 800 and 900 MHz band. The Commission awards bidding credits in auctions for geographic area 800 MHz and 900 MHz SMR licenses to firms that had revenues of no more than $15 million in each of the three previous calendar years.

70. In this Report and Order , the Commission reexamines its cellular service rules as they apply to the Gulf of Mexico Service Area. The principal goals in this proceeding are to establish a comprehensive regulatory scheme that will reduce conflict between water-based and land-based carriers, to provide regulatory flexibility to Gulf carriers because of the transitory nature of water-based sites, and to provide reliable, seamless service to the Gulf region. The Commission does not impose reporting or record keeping requirements in this Report and Order .

71. The RFA requires an agency to describe any significant alternatives that it has considered in developing its approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities. 5 U.S.C. 603(c).

72. Creation of the Eastern Gulf Coastal Zone and Gulf of Mexico Exclusive Zone. The record in this proceeding demonstrates that different approaches toward the Eastern and Western Gulf are warranted. Unlike the Western Gulf, where the Gulf carriers have substantial offshore operations, the Eastern Gulf has no offshore oil or gas drilling platforms, and consequently, the Gulf carriers have no offshore base stations from which to provide service in the coastal waters off Florida. As the Commission explains in its Report and Order , the best way to ensure that seamless cellular service is provided in the Eastern Gulf—both on land and in coastal waters—is to create a Coastal Zone along the eastern portion of the GMSA. The current positioning of the eastern GMSA boundary directly along the Florida coastline does not accomplish this because it requires land carriers to engineer their systems to limit signal strength along the coast so as to avoid extending their coverage over water.

73. Establishing an Eastern Gulf Coastal Zone will improve cellular service to coastal areas by providing an opportunity for land-based carriers to extend their service area contours into territorial coastal waters, which will in turn enable them to add cell sites close to shore and to increase signal strength (and resulting coverage) from existing sites. This will not only lead to improved coverage of coastal communities, beach resorts, and coastal roads, but will also facilitate service to coastal boat traffic operating close to shore that can be served from land-based transmitters.

74. The remainder of the eastern half of the Gulf that is not included in the Eastern Gulf Coastal Zone will be designated, along with the entire Western Gulf, as the Gulf of Mexico Exclusive Zone. In this area, as proposed in the Second Further NPRM , the Gulf carriers will have the unrestricted and exclusive right to operate cellular facilities. The Gulf carriers will have full flexibility to build, relocate, modify and remove offshore facilities throughout the Gulf of Mexico Exclusive Zone without seeking prior FCC approval or facing competing applications. While the Commission does not agree with Coastel's position that no revisions to the rules are required, the Commission believes that with relatively minor modifications, the current rules should provide sufficient incentives for both Gulf and land carriers to negotiate agreements that lead to seamless cellular coverage in coastal areas at competitive rates.

75. The Commission recognizes that as a result of its decision to apply unserved area licensing rules to the Eastern Gulf Coastal Zone, the Gulf carriers will no longer have the exclusive right to serve Florida coastal waters as part of the GMSA. The Commission must weigh, however, not only the interests of the Gulf carriers, but also the interests of adjacent land-based carriers and, most of all, the need to provide cellular subscribers in the coastal region with seamless coverage by the most technically efficient means, whether from land or water-based sites. Because the Gulf carriers have no operations in the Eastern Gulf, this decision will not result in any reduction in cellular service or stranded investment in cellular facilities by the Gulf carriers. Moreover, given the lack of existing or planned installation of offshore platforms in the Eastern Gulf Coastal Zone, there is no likelihood that the Gulf carriers would be in a position to provide service there in the foreseeable future. Nonetheless, the Commission's decision does not preclude the Gulf carriers from seeking to provide service in the Coastal Zone in conformity with the unserved area licensing rules the Commission is adopting for this region, either from land-based sites or from offshore platforms, at any point in the future should they become available.

76. The Commission declines to adopt the ALLTEL proposal that the Coastal Zone be available for use by both Gulf and land-based carriers on a shared, coordinated basis. Although ALLTEL's proposal is designed to provide a basis for negotiated agreements, the Commission believes the effect of this proposal would be to turn the Coastal Zone into a “no-man's land” where the prohibition against capture of a neighboring carrier's subscriber traffic would not apply. Moreover, by eliminating capture protection in a portion of the GMSA while retaining it in the CGSAs of the adjacent land carriers, the effect of the ALLTEL proposal would be to shift the protections afforded by existing rules in favor of the land carriers and against the Gulf carriers. The Commission is concerned that adopting the ALLTEL proposal could reduce the incentive for land carriers to negotiate with Gulf carriers regarding traffic capture in the Coastal Zone. In addition, because the ALLTEL proposal does not provide a mechanism for settling frequency coordination disputes, there is a substantial likelihood that the Commission would be burdened with resolving such matters in instances where frequency coordination failed.

77. Service Area Boundary Formula. In this Report and Order the Commission concludes that it should retain the existing land-based and water-based SAB formulas. The Commission concludes that the two-formula approach adequately accounts for the different characteristics of signal propagation over land and water, and are easier to use than a hybrid formula. Moreover, retaining the existing SAB formulas is consistent with the Commission's overall decision to maintain the existing relationship between land and Gulf carriers in the Western Gulf as the basis for negotiated solution of their operational conflicts.

78. Placement of Transmitters. The Gulf carriers urge the Commission to allow them to site their transmitters on land without the express consent of the applicable land-based licensees. The Commission believes that a blanket prohibition against Gulf carriers placing their transmitters on land is not necessary, and it will rely on its CGSA and SAB extension rules to determine whether or not the placement of a particular transmitter is permissible. Although the Gulf carriers argue that this action is insufficient, the Commission believes that this will provide additional flexibility that will facilitate contractual resolutions of the issues facing adjacent carriers along the Gulf of Mexico.

79. Pending applications. In its Report and Order , the Commission concludes that areas of the Eastern Gulf Coastal Zone that do not receive cellular service shall be defined as unserved areas and that Phase II competitive bidding procedures implemented for those areas. All unserved area applications previously filed to serve Eastern Gulf Coastal Zone areas are dismissed, as well as their associated petitions to deny. Similarly, the Commission dismisses all pending de minimis extensions into the Gulf in this Report and Order . The Commission considered whether or not the dismissal of pending licenses would impose significant additional costs or burdens on carriers. The Commission finds that this action will not prejudice carriers because such applicants have the opportunity to resubmit applications to the extent allowed under the new rules adopted in the Report and Order . The Commission concludes that, in light of the passage of several years since the applications were filed, dismissing applications filed under superseded rules and allowing carriers currently serving or desiring to serve the Eastern Gulf Coastal Zone to submit new applications is the fairest and most efficient manner to license cellular service in that region.

80. Report to Congress: The Commission will send a copy of this Report and Order , including this FRFA, in a report to be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. See 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of the Report and Order , including the FRFA, to the Chief Counsel for Advocacy of the SBA.

81. The actions taken in this Report and Order have been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law 104-13, and found to impose no new or modified reporting and record-keeping requirements or burdens on the public.

82. Pursuant to the authority of sections 4(i), 7, 303(c), 303(f), 303(g), 303(r), and 332 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(c), 303(f), 303(g), 303(r), and 332, the rule changes are adopted.

83. Pursuant to section 4(i) of the Communications Act, as amended, 47 U.S.C. 154(i), the applications set forth below are dismissed.

84. The Wireless Telecommunications Bureau will begin accepting Phase II unserved area applications for the Gulf of Mexico Coastal Zone on July 2, 2002.

Pursuant to section (4)(i) of the Communications Act, as amended, 47 U.S.C. 154(i), the creation of the Gulf of Mexico Coastal Zone, the coordinates of which are represented in Appendix A, is adopted.

85. The Petition for Rulemaking filed by Petroleum Communications is Denied .

86. The rule changes set forth below will become effective May 3, 2002.

87. It is further ordered that this proceeding is Terminated .

The following pending Phase II applications for unserved area licenses in the Gulf of Mexico Service Area (GMSA) and applications for de minimis extensions into the GMSA will be dismissed. Any associated pleadings relating to these applications are also dismissed.

This is a summary of the Commission's Fourth Order on Reconsideration and Order on Remand (Order) in CC Docket No. 96-128, adopted January 28, 2002, and released on January 31, 2002. The complete text of this Order is available for public inspection Monday through Thursday from 8:00 a.m. to 4:30 p.m. and Friday from 8:00 a.m. to 11:30 a.m. in the Commission's Consumer Information Bureau, Reference Information Center, Room CY-A257, 445 Twelfth Street, SW, Washington, DC 20554. The complete text is available also on the Commission's Internet site at www.fcc.gov. Alternative formats are available to persons with disabilities by contacting Martha Contee at (202) 418-0260 or TTY (202) 418-2555. The complete text of the Order may be purchased from the Commission's duplicating contractor, Qualex International, Room CY-B402, 445 Twelfth Street, SW, Washington, DC 20554, telephone 202-863-2893, facsimile 202-863-2898, or e-mail at qualexint@aol.com.

1. After a remand by the U.S. Court of Appeals for the D.C. Circuit in Illinois Pub. Telecomm. Ass'n v. FCC, 117 F.3d 555 (D.C. Cir. 1997), clarified on reh'g, 123 F.3d 693 (D.C. Cir. 1997), cert. denied sub nom. Virginia State Corp. Comm'n v. FCC, 523 U.S. 1046 (1998) (hereinafter Illinois ), the Commission established in this Order the amount of monthly per-payphone compensation for access charge and subscriber 800 calls, beginning November 7, 1996. This amount is $33.892 per payphone per month. The Commission also calculated the amount of monthly per-payphone compensation for 0+ calls during the period beginning November 7, 1996 through October 6, 1997 (sometimes called the interim period), if the payphone service provider was not otherwise compensated. This amount is $4.2747 per payphone per month, paid by the interexchange carrier presubscribed during the interim period.

2. In this Order, the Commission determined the rate of per-call compensation for inmate calls during the interim period, if the payphone service provider was not otherwise compensated. The interexchange carrier presubscribed during the interim period pays $0.229 per inmate call “that otherwise would have been compensated.” For example, if the policy or practice of the specific presubscribed interexchange carrier was not to pay compensation to a payphone service provider for a collect call from an inmate when the called party refused to accept charges for that particular call during the interim period, then the specific presubscribed interexchange carrier is not required now to pay compensation of $0.229 for that particular inmate call. In addition, if the presubscribed interexchange carrier failed to retain the records of inmate calls originating during the interim period for which compensation now must be paid according to this Order, then that presubscribed interexchange carrier must file a waiver request with the Common Carrier Bureau, pursuant to 47 CFR 1.3, specifying the number of inmate calls to be compensated for the interim period and the specific basis for its number. The specific payphone service provider to be compensated will be allowed thirty (30) days to file an objection with the Common Carrier Bureau, specifying an alternative number of inmate calls to be compensated for the interim period and the specific basis for its number.

3. For access code calls, subscriber 800 calls, inmate calls or 0+ calls, a payphone service provider that is affiliated with a local exchange carrier is not eligible to receive payphone compensation prior to April 16, 1997 or, in the alternative, the first day following both the termination of subsidies and payphone reclassification and transfer, whichever date is latest. The payphone compensation for access code calls, subscriber 800 calls, inmate calls or 0+ calls decided in this Order is a default amount, used in the absence of a negotiated amount. The Commission concluded moreover that the duty to pay interim compensation should not be limited to carriers with annual toll revenue above $100 million, but should include all interexchange carriers and local exchange carriers to the extent that local exchange carriers receive compensable payphone calls. In addition, the Commission excluded resellers from direct payment obligations for interim compensation to eliminate some of the non-payment problems described in the Second Reconsideration Order, 66 FR 21105 (Apr. 27, 2001). See also Third Reconsideration Order, 67 FR 3621 (Jan. 25, 2002).

4. The Commission in this Order also designated the payphone compensation interest rate for the interim period and the period beginning October 7, 1997 through April 20, 1999 (sometimes called the intermediate period) as the applicable rate for refund obligations set by the Internal Revenue Service (IRS) pursuant to section 6621 of the Internal Revenue Code, 26 U.S.C. 6621. Based on an IRS Revenue Ruling published December 26, 2001, in Appendix C of the Order, the Commission provided the interest rates applicable to payphone compensation beginning the last quarter of 1996 through March 31, 2002.

See Revenue Ruling 2001-63, 2001-52 Internal Revenue Bulletin (I.R.B.) 606 (Dec. 26, 2001), 2001 WL 1563674 (IRS RRU). For interest in subsequent quarters, interested parties must use subsequent IRS Revenue Rulings.

5. In the First Report and Order, 61 FR 52307 (Oct. 7, 1996), the Commission used annual toll revenue as a basis for allocation between the carriers of the duty to pay a specified amount per payphone per month as interim compensation. The court in Illinois rejected this allocation methodology and required that the compensation obligation be based on payment for the payphone services received by that particular carrier. Consequently, the Commission must establish a nexus between the allocation methodology and the number of payphone calls routed to a specific carrier. The Commission is still considering the numerous proposals for various allocation methodologies received in this proceeding, CC Docket No. 96-128. Comments filed in this proceeding analyzing various proposed allocation methodologies emphasized the lack of a nexus between each proposed allocation methodology and the number of payphone calls routed to any specific carrier. For this reason, in letters dated December 20, 2001, the Common Carrier Bureau requested that Qwest, Verizon, BellSouth and SBC submit, no later than January 22, 2002, the number of call attempts designated by coding digits of 27 (dumb payphone) or 70 (smart payphone), routed to an interexchange carrier point of presence or handled entirely by the Regional Bell Operating Company facilities, for 1997, 1998, and fiscal year 2001 (beginning October 1, 2000 and ending September 30, 2001). Now that the record in this proceeding was supplemented, this specific call tracking data should allow the Commission to determine an allocation of the per-payphone compensation obligations. The Commission realized that this would effectively defer the determination of compensation owed for the interim and intermediate periods until it establishes a reasonable allocation methodology. To avoid further delay, however, in establishing some of the preconditions for per-payphone compensation, and to provide the industry with some guidance as to how the Commission intends to proceed, the Commission decided to adopt this Order at this time.

6. The Commission will determine in a subsequent order the issue of offsets of interim and intermediate overpayments as contemplated in the Third Report and Order, 64 FR 13701 (Mar. 22, 1999), and additional issues remanded in Illinois, such as an allocation methodology for per-payphone compensation, and the valuation of payphone assets transferred by local exchange carriers to a separate affiliate or operating division. See Remand Public Notice, 62 FR 43686 (Aug. 15, 1997).

7. This Order was analyzed with respect to the Paperwork Reduction Act of 1995, Public Law 104-13. It contains no new or modified information collections subject to Office of Management and Budget review.

8. As required by the Regulatory Flexibility Act (RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA) was provided in the Notice of Proposed Rulemaking in CC Docket No. 96-128, 61 FR 31481 (June 20, 1996). The Commission sought written public comment on the proposals in the Notice of Proposed Rulemaking, including comment on the IRFA. A Final Regulatory Flexibility Analysis (FRFA) was provided in the First Report and Order, 61 FR 52307 (Oct. 7, 1996), the First Reconsideration Order, 61 FR 65341 (Dec. 12, 1996), the Second Report and Order, 62 FR 58659 (Oct. 30, 1997), and the Third Report and Order, 64 FR 13701 (Mar. 22, 1999).

9. This present Supplemental FRFA conforms to the RFA, as amended. See 5 U.S.C. 604. The RFA, 5 U.S.C. 601 et seq. , has been amended by the Contract with America Advancement Act of 1996, Public Law No. 104-121, 110 Stat. 847 (1996) (CWAA). Title II of the CWAA is the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).

10. To the extent that any statement in this Supplemental FRFA is perceived as creating ambiguity with respect to Commission rules or statements made in the sections of the Order preceding the Supplemental FRFA, the rules and statements set forth in those preceding sections are controlling.

11. In adopting section 276 in 1996, Public Law No. 104-104, 110 Stat. 56 (1996) (codified at 47 U.S.C. 276), Congress mandated inter alia that the Commission “establish a per call compensation plan to ensure that all payphone service providers are fairly compensated for each and every completed intrastate and interstate call using their payphone. * * *” In this Order, the Commission redetermined, pursuant to the remand by the U.S. Court of Appeals for the District of Columbia Circuit in the Illinois decision, certain aspects of the per-payphone compensation that interexchange carriers (IXCs) and local exchange carriers (LECs) must pay to payphone service providers (PSPs). Illinois, 117 F.3d. at 555.

12. The Commission received no comments in direct response to the FRFA in the Third Report and Order. The Commission believes that the rules as adopted in this Order minimize the burdens of the per-payphone compensation scheme to the benefit of all parties, including small entities. See “Steps Taken to Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered,” infra.

13. The RFA directs agencies to provide a description of, and an estimate of, the number of small entities that may be affected by the rules adopted herein, where feasible. 5 U.S.C. 604(a)(3). The RFA generally defines “small entity” as having the same meaning as the term “small business,” “small organization,” and “small governmental jurisdiction.” 5 U.S.C. 601(6). In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act, unless the Commission has developed one or more definitions that are appropriate to its activities. 5 U.S.C. 601(3) (incorporating by reference the definition of “small business concern” in 5 U.S.C. 632). Under the Small Business Act, a “small business concern” is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) meets any additional criteria established by the Small Business Administration (SBA). 5 U.S.C. 632. Pursuant to 5 U.S.C. 601(3), the statutory definition of a small business applies “unless an agency after consultation with the Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or more definitions of such term which are appropriate to the activities of the agency and publishes such definition in the Federal Register .”

14. The Commission included small incumbent LECs in this RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard ( e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” 5 U.S.C. 601(3). The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. See Letter from Jere W. Glover, Chief Counsel for Advocacy, SBA, to Chairman William E. Kennard, FCC (May 27, 1999). The Small Business Act contains a definition of “small business concern,” which the RFA incorporates into its own definition of “small business.” See 5 U.S.C. 632(a) (Small Business Act); 5 U.S.C. 601(3) (RFA). SBA regulations interpret “small business concern” to include the concept of dominance on a national basis. 13 CFR 121.102(b). The Commission therefore included small incumbent LECs in this RFA analysis, although the Commission emphasizes that this RFA action has no effect on the Commission's analyses and determinations in other, non-RFA contexts.

15. Incumbent Local Exchange Carriers. Neither the Commission nor the SBA has developed a specific definition of small providers of incumbent local exchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, North American Industry Classification System (NAICS) code 513310. According to the most recent Telephone Trends Report data, 1,335 incumbent LECs reported that they were engaged in the provision of local exchange services. FCC, Common Carrier Bureau, Industry Analysis Division, Trends in Telephone Service (Aug. 2001) ( Telephone Trends Report ), Table 5.3. Of these 1,335 carriers, 1,037 reported that they have 1,500 or fewer employees and 298 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of incumbent LECs that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that 1,037 or fewer providers of local exchange service are small entitles that may be affected by the rules and policies adopted herein.

16. Competitive Local Exchange Carriers. Neither the Commission nor the SBA has developed a specific definition for small providers of competitive local exchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the Commission's most recent Telephone Trends Report data, 349 companies reported that they were engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Telephone Trends Report, Table 5.3. Of these 349 companies, 297 reported that they have 1,500 or fewer employees and 52 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. The Commission does not have data specifying the number of these carriers that are either dominant in their field of operations or are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of competitive local exchange carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that 297 or fewer providers of competitive local exchange service are small entities that may be affected by the rules.

17. Competitive Access Providers. Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to competitive access providers (CAPS). The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the Commission's most recent Telephone Trends Report data, 349 CAPs or competitive local exchange carriers and 60 “Other Local Exchange Carriers” reported that they were engaged in the provision of either competitive access provider services or competitive local exchange carrier services. Telephone Trends Report, Table 5.3. Of these 349 competitive access providers and competitive local exchange carriers, 297 reported that they have 1,500 or fewer employees and 52 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. Of the 60 “Other Local Exchange Carriers,” 56 reported that they have 1,500 or fewer employees and 4 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. The Commission does not have data specifying the number of these companies that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of CAPS or “Other Local Exchange Carriers” that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 297 or fewer small entity CAPS and 56 or fewer small entity “Other Local Exchange Carriers” that may be affected by the rules.

18. Local Resellers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513330. According to the Commission's most recent Telephone Trends Report data, 87 companies reported that they were engaged in the provision of local resale services. Telephone Trends Report, Table 5.3. Of these 87 companies, 86 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. Id. The Commission does not have data specifying the number of these local resellers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of local resellers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 86 or fewer small business local resellers that may be affected by the rules.

19. Toll Resellers. The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513330. According to the Commission's most recent Telephone Trends Report data, 454 companies reported that they were engaged in the provision of toll resale services. Telephone Trends Report, Table 5.3. Of these 454 companies, 423 reported that they have 1,500 or fewer employees and 31 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. The Commission does not have data specifying the number of these toll resellers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of toll resellers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 423 or fewer toll resellers that may be affected by the rules.

20. Payphone Service Providers . Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to payphone service providers (PSPs). The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the Commission's most recent Telephone Trends Report data, 758 PSPs reported that they were engaged in the provision of payphone services. Telephone Trends Report , Table 5.3. Of these 758 payphone service providers, 755 reported that they have 1,500 or fewer employees and 3 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id . The Commission does not have data specifying the number of these PSPs that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of PSPs that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 755 or fewer PSPs that may be affected by the rules.

21. Interexchange Carriers . Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to providers of interexchange services. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the most recent Telephone Trends Report data, 204 carriers reported that their primary telecommunications service activity was the provision of interexchange services. Telephone Trends Report , Table 5.3. Of these 204 carriers, 163 reported that they have 1,500 or fewer employees and 41 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id . The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of IXCs that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 163 or fewer small entity interexchange carriers that may be affected by the rules.

22. Operator Service Providers . Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to operator service providers. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the Commission's most recent Telephone Trends Report data, 21 companies reported that they were engaged in the provision of operator services. Telephone Trends Report , Table 5.3. Of these 21 companies, 20 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. Id . The Commission does not have data specifying the number of these operator service providers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of operator service providers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 20 or fewer small entity operator service providers that may be affected by the rules.

23. Prepaid Calling Card Providers . The SBA has developed a definition for small businesses within the category of Telecommunications Resellers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513330. According to the Commission's most recent Telephone Trends Report data, 21 companies reported that they were engaged in the provision of prepaid calling cards. Telephone Trends Report , Table 5.3. Of these 21 companies, 20 reported that they have 1,500 or fewer employees and one reported that, alone or in combination with affiliates, it had more than 1,500 employees. Id. The Commission does not have data specifying the number of these prepaid calling card providers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of prepaid calling card providers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 20 or fewer small business prepaid calling card providers that may be affected by the rules.

24. Satellite Service Carriers . The SBA has developed a definition for small businesses within the category of Satellite Telecommunications. Under that SBA definition, such a business is small if it has $11 million or less in average annual receipts. 13 CFR 121.201, NAICS code 513340. According to the Commission's most recent Telephone Trends Report data , 21 carriers reported that they were engaged in the provision of satellite services. Telephone Trends Report , Table 5.3. Of these 21 carriers, 16 reported that they have 1,500 or fewer employees and five reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id. The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of satellite service carriers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 16 or fewer small business satellite service carriers that may be affected by the rules.

25. Other Toll Carriers . Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to “Other Toll Carriers.” This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513310. According to the Commission's most recent Telephone Trends Report data, 17 carriers reported that they were engaged in the provision of “Other Toll Services.” Telephone Trends Report , Table 5.3. Of these 17 carriers, 15 reported that they have 1,500 or fewer employees and two reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id . The Commission does not have data specifying the number of these “Other Toll Carriers” that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of “Other Toll Carriers” that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 15 or fewer small business “Other Toll Carriers” that may be affected by the rules.

26. Wireless Service Providers . The SBA has developed a definition for small businesses within the two separate categories of Paging or Cellular and Other Wireless Telecommunications. Under that SBA definition, such a business is small if it has 1,500 or fewer employees. 13 CFR 121.201, NAICS code 513322. According to the Commission's most recent Telephone Trends Report data, 1,495 companies reported that they were engaged in the provision of wireless service. Telephone Trends Report , Table 5.3. Of these 1,495 companies, 989 reported that they have 1,500 or fewer employees and 506 reported that, alone or in combination with affiliates, they have more than 1,500 employees. Id . The Commission does not have data specifying the number of these carriers that are not independently owned and operated, and thus is unable at this time to estimate with greater precision the number of wireless service providers that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 989 or fewer small wireless service providers that may be affected by the rules.

27. Broadband Personal Communications Service . The broadband personal communications service (PCS) spectrum is divided into six frequency blocks designated A through F, and the Commission has held auctions for each block. The Commission defined “small entity” for Blocks C and F as an entity that has average gross revenues of less than $40 million in the three previous calendar years. See Amendment of Parts 20 and 24 of the Commission's Rules—Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap , WT Docket No. 96-59, Report and Order , 61 Fed. Reg. 33859 (July 1, 1996); see also 47 CFR 24.720(b). For Block F, an additional classification for “very small business” was added and is defined as an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. See Amendment of Parts 20 and 24 of the Commission's Rules—Broadband PCS Competitive Bidding and the Commercial Mobile Radio Service Spectrum Cap , WT Docket No. 96-59, Report and Order , 61 Fed. Reg. 33859 (July 1, 1996). These regulations defining “small entity” in the context of broadband PCS auctions have been approved by the SBA. See, e.g., Implementation of Section 309(j) of the Communications Act—Competitive Bidding , PP Docket No. 93-253, Fifth Report and Order , 59 FR 37566 (July 22, 1994). No small businesses within the SBA-approved definition bid successfully for licenses in Blocks A and B. There were 90 winning bidders that qualified as small entities in the Block C auctions. A total of 93 small and very small business bidders won approximately 40 percent of the 1,479 licenses for Blocks D, E, and F. FCC News, Broadband PCS, D, E and F Block Auction Closes, No. 71744 (rel. Jan. 14, 1997); see also Amendment of the Commission's Rules Regarding Installment Payment Financing for Personal Communications Services (PCS) Licensees , WT Docket No. 97-82, Second Report and Order , 62 FR 55348 (Oct. 24, 1997). Based on this information, the Commission concludes that the number of small broadband PCS licensees will include the 90 winning C Block bidders and the 93 qualifying bidders in the D, E, and F Block auctions, for a total of 183 small entity PCS providers as defined by the SBA and the Commission's auction rules.

28. 800 MHz and 900 MHz Specialized Mobile Radio Licensees . The Commission awards “small entity” and “very small entity” bidding credits in auctions for Specialized Mobile Radio (SMR) geographic area licenses in the 800 MHz and 900 MHz bands to firms that had revenues of no more than $15 million in each of the three previous calendar years, or that had revenues of no more than $3 million in each of the three previous calendar years, respectively. 47 CFR 90.814. In the context of both the 800 MHz and 900 MHz SMR service, the definitions of “small entity” and “very small entity” have been approved by the SBA. These bidding credits apply to SMR providers in the 800 MHz and 900 MHz bands that either hold geographic area licenses or have obtained extended implementation authorizations. The Commission does not know how many firms provide 800 MHz or 900 MHz geographic area SMR service pursuant to extended implementation authorizations, nor how many of these providers have annual revenues of no more than $15 million. One firm has over $15 million in revenues. The Commission assumes, for its purposes here, that all of the remaining existing extended implementation authorizations are held by small entities, as that term is defined by the SBA. The Commission has held auctions for geographic area licenses in the 800 MHz and 900 MHz SMR bands. There were 60 winning bidders that qualified as small and very small entities in the 900 MHz auctions. Of the 1,020 licenses won in the 900 MHz auction, bidders qualifying as small and very small entities won 263 licenses. In the 800 MHz SMR auction, 38 of the 524 licenses won were won by small and very small entities. Consequently, the Commission estimates that there are 301 or fewer small entity SMR licensees in the 800 MHz and 900 MHz bands that may be affected by the rules.

29. Rural Radiotelephone Service . The Commission has not adopted a definition of small entity specific to the Rural Radiotelephone Service. The service is defined in 47 CFR 22.99. A significant subset of the Rural Radiotelephone Service is the Basic Exchange Telephone Radio Systems (BETRS). BETRS is defined in 47 CFR 22.757, 22.759. For purposes of this Supplemental FRFA, the Commission uses the SBA's definition applicable to wireless companies, i.e. , an entity employing no more than 1,500 persons. 13 CFR 121.201, NAICS codes 513321, 513322. There are approximately 1,000 licensees in the Rural Radiotelephone Service, and the Commission estimates that almost all of them qualify as small entities under the SBA's definition. Consequently, the Commission estimates that there are 1,000 or fewer small entity licensees in the Rural Radiotelphone Service that may be affected by the rules.

30. Fixed Microwave Services . Microwave services include common carrier, private-operational fixed, and broadcast auxiliary radio services. For common carrier fixed microwave services (except Multipoint Distribution Service), see 47 CFR part 101 (formerly 47 CFR part 21). Persons eligible under parts 80 and 90 of the Commission's rules can use Private Operational-Fixed Microwave services. See 47 CFR parts 80, 90. Stations in this service are called operational-fixed to distinguish them from common carrier and public fixed stations. Only the licensee may use the operational-fixed station, and only for communications related to the licensee's commercial, industrial, or safety operations. Auxiliary Microwave Service is governed by 47 CFR part 74. The Auxiliary Microwave Service is available to licensees of broadcast stations and to broadcast and cable network entities. Broadcast auxiliary microwave stations are used for relaying broadcast television signals from the studio to the transmitter, or between two points, such as, a main studio and an auxiliary studio. The service also includes mobile TV pickups, which relay signals from a remote location back to the studio.

31. At present, there are approximately 22,015 common carrier fixed licensees and 61,670 private operational-fixed licensees and broadcast auxiliary radio licensees in the microwave services. The Commission has not defined a small business specifically with respect to microwave services. For purposes of this Supplemental FRFA, the Commission utilizes the SBA's definition applicable to wireless companies—i.e., an entity with no more than 1,500 persons. 13 CFR 121.201, NAICS codes 513321, 513322. The Commission does not have data specifying the number of these licensees that have more than 1,500 employees, and thus is unable at this time to estimate with greater precision the number of fixed microwave service licensees that would qualify as small business concerns under the SBA's definition. Consequently, the Commission estimates that there are 22,015 or fewer small common carrier fixed microwave licensees and 61,670 or fewer small private operational-fixed microwave licensees and small broadcast auxiliary radio licensees in the microwave services that may be affected by the rules. The Commission notes, however, that the common carrier microwave fixed licensee category includes some large entities.

32. 39 GHz Licensees . The Commission defined “small entity” for 39 GHz licenses as an entity that has average gross revenues of less than $40 million in the three previous calendar years. See Amendment of the Commission's Rules Regarding the 37.0-38.6 GHz and 38.6-40.0 GHz Bands , ET Docket No. 95-183, Report and Order , 63 FR 6079 (Feb. 6, 1998). An additional classification for “very small business” was added and is defined as an entity that, together with affiliates, has average gross revenues of not more than $15 million for the preceding three calendar years. Id . The SBA approved these regulations defining “small entity” in the context of 39 GHz auctions. See Letter to Kathleen O'Brien Ham, Chief, Auctions and Industry Analysis Division, Wireless Telecommunications Bureau, FCC, from Aida Alvarez, Administrator, SBA (Feb. 4, 1998). The auction of the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8, 2000. The 18 bidders who claimed small business status won 849 licenses. Consequently, the Commission estimates that there are 18 or fewer small entities that are 39 GHz licensees that may be affected by the rules.

33. As mandated by the court in the Illinois decision, the Commission established in this Order a compensation scheme for inmate telephone service during the interim period, if the payphone service provider (PSP) was not otherwise compensated for its inmate service. In a correctional institution, the PSP presubscribes the inmate telephones to a specific interexchange carrier (IXC) pursuant to a contract between the PSP and the interexchange carrier. If this previously existing contract failed to establish a duty to count and track inmate calls for compensation purposes, or if the presubscribed IXC failed to retain its records of the number of compensable inmate calls originating during the interim period for which compensation now must be paid according to this Order, the Commission established a waiver procedure that provides the maximum amount of flexibility for the presubscribed IXC and the PSP, including small IXCs and small PSPs, to propose the number of inmate calls to be compensated. According to this waiver provision, the IXC presubscribed during the interim period must file a waiver request with the Common Carrier Bureau, pursuant to 47 CFR 1.3, specifying the number of inmate calls to be compensated for the interim period and the specific basis for its number. The specific PSP to be compensated is allowed thirty (30) days to file an objection with the Common Carrier Bureau, specifying an alternative number of inmate calls to be compensated for the interim period and the specific basis for its number. With this exception for those situations in which the number of compensable inmate calls for the interim period is not available, this Order imposes no new reporting, recordkeeping or other compliance requirements not previously adopted in this or related payphone proceedings.

34. To minimize the economic impact and administrative burden for both payors and recipients of payphone compensation, including small entities, the Commission required the payment of a flat fee of $33.892 per payphone per month for access code and subscriber 800 calls originating from November 7, 1996 through October 6, 1997, for all payphones. For the same reason, the Commission also set compensation at a flat fee of $33.892 per payphone per month for access code and subscriber 800 calls originating from October 7, 1997 through April 20, 1999, for those payphones for which compensation is or was not paid on a per-call basis. The payment of a prescribed flat fee of $4.2747 per payphone per month for 0+ calls originating from November 7, 1996 through October 6, 1997, to PSPs that were not otherwise compensated for 0+ calls during the interim period, minimizes the economic impact and administrative burden for both IXCs and PSPs, including small entities.

35. Some of both payors and recipients of payphone compensation are small entities. Over time, the Commission learned that steps taken to minimize the economic impact on payors of payphone compensation that are small entities diminish the compensation received by recipients of payphone compensation that are small entities. This decrease in compensation contradicts one of the mandates of section 276 that PSPs should receive compensation for each and every completed call originating at one of their payphones. For example, to ease the burden of implementing the per-call payphone compensation scheme on midsize and small local exchange carriers, the Common Carrier Bureau granted a waiver in 1998 to relieve such entities of the economic burden of installing flexible automatic number identification (FlexANI) software on their switches. If the PSP uses “smart” payphones, the payphone calls of small PSPs routed through these particular switches lacking FlexANI software cannot be counted, tracked, and compensated on a per-call basis. As a result, compensation must be paid on a per-payphone, not per-call, basis. The Bureau limited such payphone compensation to 16 calls per month, even if a small payphone service provider's payphone calls are more than 200 calls per payphone per month at a truck stop, for example, instead of 16 payphone calls per month. Bureau Per-call Waiver Order, 63 FR 26497 (May 13, 1998). At a rate of $0.229 per payphone call as calculated in this Order, compensation would be limited to $3.664 per payphone per month starting on November 7, 1996 through April 20, 1999. At the rate of $0.24 per payphone call as calculated in the Third Report and Order, compensation would be limited to $3.84 per payphone per month after April 20, 1999. Accordingly, the Commission found it necessary in this Order to balance the equities between these two groups of small entities.

36. In another example of the Commission's attempt to ease an economic impact, in 1996 the Commission exempted LECs and IXCs with annual toll revenues of $100 million or less from the economic and administrative burdens of paying per-payphone compensation. The U.S. Court of Appeals for the District of Columbia Circuit vacated this determination as arbitrary and capricious in the Illinois decision, partially because it would deprive recipients of payphone compensation of approximately $4 million per month, according to the court. Illinois, 117 F.3d at 565. After the Illinois decision, the Commission was asked again to exempt carriers with annual toll revenues of $100 million or less from the economic and administrative burdens of paying interim compensation. In the alternative, the Commission was asked to exempt carriers with monthly toll revenues of $1 million or less from the economic and administrative burdens of paying interim compensation. In this Order, the Commission followed the mandates of the court in the Illinois decision and decided not to exempt carriers based on the amount of toll revenue.

37. The Commission will send a copy of this Order, including this Supplemental FRFA, in a report to Congress pursuant to the Congressional Review Act. 5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of this Order, including this Supplemental FRFA, to the Chief Counsel for Advocacy of the Small Business Administration. See 5 U.S.C. 604(b).

38. Accordingly, pursuant to the authority contained in 47 U.S.C. 151, 154, 201-205, 215, 218, 219, 220, 226, 276 and 405, It is ordered that the policies, rules and requirements set forth herein Are Adopted .

39. It is further ordered that the Commission's Consumer Information Bureau, Reference Information Center, Shall Send a copy of this Fourth Order on Reconsideration and Order on Remand, including the Supplemental Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

This is a summary of the Commission's Order on Reconsideration (“ Order ”) in FCC 02-40, adopted February 12, 2002 and released February 14, 2002. The complete text of this Order is available for inspection and copying during normal business hours in the FCC Reference Center, Room CY-A257, 445 12th Street, SW., Washington, DC and may also be purchased from the Commission's copy contractor, Qualex International, Portals II, 445 12th Street SW., Room CY-B-402, Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-2898, or via email qualexint@aol.com.

1. In April, 2001 we released an Order implementing the provisions of the LPTV Pilot Project Digital Data Services Act (DDSA), ( Order, In the Matter of Implementation of LPTV Digital Data Services Pilot Project, FCC 01-137, 66 FR 29040 (May 29, 2001)). The DDSA requires the Commission to issue regulations establishing a pilot project pursuant to which specified Low Power Television (LPTV) licensees or permittees can provide digital data services to demonstrate the feasibility of using LPTV stations to provide high-speed wireless digital data service, including Internet access, to unserved areas (Public Law 106-554, 114 Stat. 4577, December 21, 2000, Consolidated Appropriations—FY 2001, section 143, amending section 336 of the Communications Act of 1934, as amended, 47 U.S.C. 336, to add new subsection (h). 47 U.S.C. 336(h)(7)). As defined by the DDSA, digital data service includes: (1) Digitally-based interactive broadcast service; and (2) wireless Internet access (47 U.S.C. 336(h)(7)). The DDSA identifies twelve specific LPTV stations that are eligible to participate in the pilot project, and directs the Commission to select a station and repeaters to provide service to specified areas in Alaska. In this Order, we address issues raised in a petition for reconsideration of the Order filed by U.S. Interactive, L.L.C., d/b/a AccelerNet, and revise provisions of that Order in some respects. AccelerNet is an LPTV licensee providing one-way digital data service in Houston, Texas, from station KHLM-LP, and operating stations that are eligible to participate in DDSA pilot projects. Its investors own or have rights to acquire six of the other eight stations eligible for the pilot projects.

2. In the Order, we noted that the DDSA does not specify how long the pilot project should last. Since the DDSA specified that our last report to Congress evaluating the utility of the pilot project is due on June 30, 2002, we clarified that we will issue experimental letter authorizations for the pilot project that will expire on June 30, 2002, unless the term is extended prior to that date. We delegated authority to the Mass Media Bureau to extend the term of the authorizations for individual participants or for participants as a group, and to do so by Public Notice, in the event that it is determined that the term of the pilot project should be extended.

3. In its petition, AccelerNet asserts that the Commission should grant conditional pilot project licenses for the term of the underlying LPTV station license, including any renewals, subject only to early termination of the pilot project license if irremediable interference occurs, rather than experimental licenses. AccelerNet asserts that the statute implicitly requires the Commission to allow operation of the pilot projects on an indefinite basis, subject to termination only if interference occurs which cannot otherwise be remedied. According to AccelerNet, inclusion of a sunset provision in the Order would cause the demise of the project. It contends that investors are reluctant to finance pilot projects; that equipment manufacturers will not be willing to develop necessary equipment needed by the project; that several years will be needed to implement and demonstrate the utility of the project; and, finally, that the pilot project is intended to ultimately provide a needed service that should not be sunsetted if it works. To support its assertion, it first argues that Congress would not have provided for annual fees if the pilot projects were intended to be of limited duration. It observes that a provision in the statute at section 336(h)(6) for annual fees to be paid by stations participating in the pilot projects is similar to the provision for annual fees to be paid by digital television stations offering ancillary or supplementary services at section 336(e). Second, AccelerNet argues, although Congress expressly provided for termination under certain conditions, those conditions did not include a time limit (citing sections 336(h)(3)(C) (Commission to adopt regulations providing for termination or limitation of any pilot project station or remote transmitter if interference occurs to other users of the core television spectrum) and 336(h)(5)(A) (Commission may limit provision of digital data service from pilot project stations if interference is caused)). It contends that a sunset provision was considered and specifically rejected during drafting negotiations. (Asserting a sunset provision was specifically rejected when section 336(h) and the DDSA were legislated). Finally, AccelerNet argues, the statutory dates specified for the Commission to issue reports concerning the efficacy of the pilot projects are unrelated to any supposed term of the pilot projects. (The Commission was required to report back to Congress on June 30, 2001 and June 30, 2002. See section 336(h).) Rather, it claims, the reporting requirements exist to enable Congress to determine whether to expand the provision of digital data services to all or some additional portion of LPTV stations.

4. On reconsideration, we have decided to revise our provisions regarding the terms of the pilot project. Rather than issue experimental letter authorizations, the procedure we described in the Order, we will allow the LPTV stations that are eligible for the pilot project to participate in the pilot project for the term of their LPTV licenses, including renewals of those licenses, subject to early termination if irremediable interference occurs, pursuant to the statute.

5. Pursuant to § 74.731(g) of our rules, LPTV stations may operate as TV translator stations, or to originate programming and commercial matter, either through the retransmission of a TV broadcast signal or via original programming (47 CFR 74.731(g); see also 47 CFR 74.701(f)). To allow the pilot project stations to participate in the project, we will grant them a waiver of this rule (47 CFR 1.3, “Any provision of the rules may be waived by the Commission on its own motion or on petition if good cause therefor is shown”). The waiver will be renewable with the renewal of the underlying LPTV license. All other LPTV rules will be applicable to these stations, except as waived herein or upon request by pilot project participants, or as specified in the Order. (We will waive the following rules as inapplicable to the services provided under this pilot project: 47 CFR 74.731(g) (permissible service), 74.732(g) (booster eligibility), 74.736(a) (emissions), 74.750(a) (FCC transmitter certification), 74.751(a) (modification of transmission systems), 74.761 (frequency tolerance), and 74.763(c) (time of operation)).

6. As stated, this is a pilot project. Pilot project stations will operate pursuant to their LPTV licenses instead of experimental letter authorizations. To obtain a waiver of § 74.731(g), pilot project-eligible stations should follow the application procedures specified in paragraph 8 of the Order. Rather than filing an application for experimental authority, a DDSA-eligible applicant should file an informal letter application requesting the addition of digital data service pilot project facilities to its existing LPTV authorization and including the information requested in that paragraph. We will also require them to undertake the testing described in paragraph 10, and to include the information requested in that paragraph in their applications so that we may assess the interference potential of this service. No application filing fee is required to add or modify pilot project digital facilities. We will issue a waiver by letter adding pilot project facilities to the LPTV authorization for the term of the LPTV license, renewable with that license, after following the public notice procedures specified in paragraph 18 of the Order. Paragraph 19 of the Implementation Order, regarding facilities changes, will continue to apply. Applications to change channel or transmitter site location(s) must be filed in the normal manner on FCC Form 346, seeking a modified construction permit for the underlying analog facilities of the licensed LPTV station or a modification of such facilities in an existing analog LPTV station construction permit. The application for modification of analog facilities is feeable. Following grant of the change in such authorized LPTV facilities, an associated informal application to modify the pilot project portion of the authorization will be considered in accordance with the above procedures. This two step process is necessary because, where interference protection to digital data services is required, the protected area is that defined by the analog LPTV service contour (47 CFR 74.707(a)), based on the authorized analog LPTV facilities, an associated informal application to modify the pilot project portion of the authorization will be considered). All other requirements of the Order apply unless changed herein.

7. Additionally, and as AccelerNet observes, the DDSA specifies that a station may provide digital data service unless provision of the service causes interference in violation of the Commission's existing rules to full-service analog or digital television stations, Class A television stations, or television translator stations. In keeping with these provisions in the DDSA, we will not renew any waiver to operate pursuant to the pilot project if the station requesting renewal causes irremedial interference to other stations.

8. We find that it is in the public interest to grant these waivers generally based on the intent of Congress in the DDSA that it is in the public interest to establish this pilot project. In the Order, we stated that we would extend the term of the pilot projects, by Public Notice and on delegated authority, upon a determination that the term of the pilot project should be extended. We intended to use this process so that the original term of the pilot projects could be extended with minimal difficulty, and did not intend that the term would automatically expire after June 30, 2002. Nonetheless, we recognize that the limited term specified in the Order could pose problems with establishing the project, as AccelerNet described, because investors may be unwilling to invest without greater certainty, particularly in the current challenging economic climate, and that it may take longer to develop the equipment than originally contemplated. It is also conceivable, as AccelerNet contends, that equipment manufacturers might be less willing to develop the equipment needed by the project without the certainty of a longer initial term. Moreover, as AccelerNet argues, it is possible that implementing and proving the practicality of the project could require a period of years. Accordingly, to assure that our procedures do not undermine the establishment of the pilot project, we will instead base the license terms of the pilot project stations on the terms of the underlying LPTV licenses and grant the necessary rule waivers, subject to the interference prohibitions in the statute and as delineated in the Order. (We wish to make clear that this is a pilot project, and the decisions made herein are not intended to prejudge any future decisions on digital operation on LPTV stations generally).

9. We recognize that Congress wanted to give the pilot project a fair opportunity to succeed. The DDSA does not contain a sunset date; it is, therefore, legally permissible to make the term of the pilot project coincident with the term of the LPTV license, subject to early termination in the event of irremediable interference. (Although Congress specified particular subjects for which it wanted the Commission to issue rules in section 336(h)(3), that section does not direct the Commission to issue a sunset rule for the pilot projects. Likewise, no time limitation is specified in sections 336(h)(1), which allows pilot project stations to ask the Commission to provide digital data service or in section 336(h)(5)(b), which allows a licensee to move a station to another location for the purpose of the pilot projects). Our goal is to implement the statute while assuring that no objectionable interference occurs. Granting renewable waivers is not overly burdensome to participants in the pilot project, and it serves the purpose of ensuring that others are protected from interference.

10. To assure that the project does not cause interference, we will not only assess issues of interference that may arise in connection with the filing of the renewal application, but in addition the interference resolution provisions of paragraph 11 of the Order will apply. Paragraph 11 requires stations participating in the pilot project to comply with § 74.703 of the Commission's rules regarding interference. It also specifies additional procedures that participating stations must follow in order to resolve interference problems in accordance with requirements set forth in the DDSA). We clarify that we have authority to take any measures, including terminating digital data service waivers and therefore requiring the discontinuance of the participation of any station in the project in the event of irremediable interference. LPTV stations are secondary and must provide interference protection as described in paragraph 8 of the Order. The waivers will be conditioned accordingly.

11. In the Order, we stated our belief that requirements similar to those contained in §§ 5.93(a) and (b) of the rules should apply to the pilot program. (No other provisions of part 5 of the Commission's rules were applied). Thus, we required that all transmitting and/or receiving equipment used in the pilot program be owned by, leased to, or otherwise under the control of the LPTV licensee (47 CFR 5.93(a)). We said that response station equipment may not be owned by subscribers to the experimental data service to insure that the LPTV licensee has control of the equipment if and when the pilot program terminates. In addition, we required the LPTV licensee to inform anyone participating in the experiment, including but not limited to subscribers or consumers, that the service or device is provided pursuant to a pilot program and is temporary (47 CFR 5.93(b)).

12. AccelerNet argues that the requirement that all transmitting and receiving equipment be owned by the licensee is unwarranted and not required or contemplated by the DDSA. It also objects to the requirement that the LPTV licensee shall inform anyone participating in the project that the service is temporary. These requirements were necessary under our rules governing experimental licensees. Because we are, on reconsideration, treating this endeavor not as an experimental project with an initial term of only 2 years, but as a unique pilot project that is a part of the underlying LPTV license and is for the term of that license, §§ 5.93(a) and (b) are no longer applicable because there is no longer the concern that the project will be terminated after only 2 years. We do not intend to unnecessarily restrict the ability of the pilot projects to gain market acceptance, make it difficult for the licensees to gauge subscriber acceptance of the service, or be unduly burdensome considering the other risks assumed by licensees in a pilot project. We will require pilot project licensees and permittees to advise recipients of digital data service that they are participating in a pilot project, which could be terminated in the event of irremedial interference to protected broadcast and other services. AccelerNet has stated that it has no objection to this requirement.

13. In the Order, we said that we will require pilot project licensees and permittees employing two-way technology to attach labels to every response station transceiver (fixed or portable) in a conspicuous fashion visible in all directions and readable at distances beyond the minimum separation distances between the radiating equipment and the user. For fixed response stations, we also concluded that their effective radiated power (ERP) should be as low as is consistent with satisfactory communication with a base station, and in no case should the ERP (digital average power) exceed 10 watts. For portable response stations, we similarly concluded that their ERP should be as low as is consistent with satisfactory communication with a base station, and in no case should the ERP (digital average power) exceed 3 watts.

14. Labeling. AccelerNet argues that the requirement that RF station transceivers be marked to indicate potential radio frequency hazards should not apply where the transmit power of the transceiver is so low as to present no safety hazard at any distance. It contends that requiring marking in those circumstances is overregulatory, and could unnecessarily raise concerns among potential subscribers, causing the pilot project to fail from lack of consumer acceptance. Arguing that its portable devices are not expected to exceed one watt in power, it contends that the Commission's current rules sufficiently protect the public (citing 47 CFR 2.10093 [“Radiofrequency radiation exposure evaluation; portable devices.”]). It argues that the Order should be revised to provide that portable devices shall comply with the provisions of § 2.1093 of the Commission's rules (47 CFR 2.1093), including the radiation exposure limitations set forth in § 2.1093(d)(2).

15. We agree with the petitioner that RF safety rules for digital data service devices should be consistent with existing rules for similar devices. However, similar devices that are used as subscriber transceivers and marketed to the public have been subject to labeling requirements to alert consumers to the presence of RF energy and to ensure that safe distances from transmitting antennas are maintained (47 CFR 1.1307(b)). Such devices have generally been classified as “mobile” devices under our rules, not as “portable” devices. For purposes of determining how to evaluate RF devices for compliance with the Commission's RF safety rules, non-fixed devices have been classified as either “mobile” or “portable,” based on the separation distance between radiating structures and users (this is defined in 47 CFR 2.1091 and 2.1093 and is discussed in the FCC's OET Bulletin 65, (1997)). A classification of “mobile” means that compliance with the Commission's RF safety rules can be accomplished by providing users with information on safe distances to maintain from transmitting antennas in order to meet field intensity limits for Maximum Permissible Exposure (MPE).

16. The petitioner proposes to have digital data service devices be subject to the provisions of § 2.1093, the section of our rules which specifies requirements for devices classified as “portable” in terms of compliance with the Commission's limits for localized Specific Absorption Rate (SAR). For a device to be classified as “portable” it is assumed that it is possible for the separation distance between the radiating structure of the device and a user to be less than 20 cm during transmit operation. Compliance with the SAR limit (the general population limit of 1.6 watts per kilogram in this case) is typically determined by means of laboratory testing ( see Supplement C (2001) to the FCC's OET Bulletin 65 (1997) for details). We agree that the response stations used in connection with the pilot project can be classified as “portable” devices and subject to the provisions of § 2.1093, as long as the appropriate SAR data are obtained and made available to the Commission demonstrating compliance with the SAR limit. A determination of “worst case” exposure would be indicated by evaluating SAR with a zero separation distance. If compliance with the SAR limit is demonstrated in this condition, using maximum operating power, then labeling would not be required, since no separation distance would be required for compliance. On the other hand, if a certain separation distance (less than 20 cm) is required for compliance with the SAR limit, then the applicant will have to demonstrate that a user cannot be exposed closer than that distance.

17. Accordingly, we will require portable response stations used in connection with the pilot project to comply with the RF exposure limits and related provisions of § 2.1093 of our rules, relevant to devices subject to routine environmental evaluation for RF exposure prior to equipment authorization or use. Although we have not required that these devices be subject to equipment authorization, applicants must submit to the Commission evidence of compliance with the SAR limits specified in § 2.1093, including information on how any required separation distances, as discussed above, will be maintained. Based on our previous experience in analyzing SAR from portable devices, we will not require SAR testing and will categorically exclude from routine RF evaluation devices that do not radiate a power level in excess of 50 milliwatts.

18. In the Order, we anticipate the possibility that several types of transmission facilities may be involved in each pilot project station. First, we expect that most, if not all, of these projects will involve digital transmissions from a main base station at the authorized site of the underlying LPTV station. Unless the evaluation of its digital modulation method requires otherwise, we would assume that operation of such a facility will not represent a significantly increased interference threat compared to the authorized LPTV station if the antenna height is not increased and the digital average power does not exceed 10 percent of the authorized analog LPTV power (10 dB less power). We noted that in DTV service, this level of digital power is adequate to provide coverage of the same area. We said that the Commission's staff will not evaluate at the application stage the interference potential of a main digital base station conforming to this restriction.

19. In the Order, we said that the second type of transmission facility might consist of one or more additional base stations (boosters) located at sites away from the authorized LPTV transmitter site. We decided to treat such stations as we treat analog TV booster stations except that each booster may originate its own data messages. As such, we noted our expectation that such facilities would be limited to a site location, power and antenna height combination that would not extend the coverage area of the main base station in any direction. We stated that we would require an exhibit demonstrating that booster coverage is contained within main base station coverage, based on the digital field strength predicted from the main base station at the protected contour of the underlying analog LPTV authorization. Further, we stated that we would assume at the application stage that such an operation will not cause additional interference unless an interference situation is demonstrated in an informal objection to the application. We said that, absent such an objection, the Commission's staff will not evaluate at the application stage the interference potential of an additional digital base station conforming to this restriction.

20. Digital Power Issue . AccelerNet asks the Commission to allow UHF LPTV pilot project stations to transmit with up to 15kW average digital power if existing interference protection criteria are met. AccelerNet argues that the provision in the Order could be read to limit average digital power to 10 percent of the authorized analog power of the underlying LPTV station. It states that discussion with staff indicates that this was not intended, and asks that the Commission clarify that this is the case. It adds that a 10 percent limit would be an unjustified restriction on provision of its service, because, under the rules, UHF LPTV stations are limited to 15 kW average digital power if existing interference protection criteria are met (47 CFR 74.735(b)(2)). It asks that the Order be clarified to allow operation up to 15 kW average digital power if existing interference protection criteria are met.

21. Boosters . AccelerNet urges the Commission to allow booster stations to operate at any point within the existing authorized coverage contours of the main base station, provided that no interference to protected stations would be created. It asks that some degree of flexibility be provided for the location of booster stations to allow LPTV stations to cover natural market areas associated with their communities of license, but which may be outside their existing coverage contours. It suggests that booster stations be allowed to operate at any point within the existing authorized coverage contours of the main base station, provided that no interference to protected stations would be created, and provided that the pilot project stations would not be entitled to interference protection outside their existing authorized service contours of the underlying analog LPTV authorization.

22. On reconsideration of both these issues, we reach the same conclusion, of which there are two parts. First we deal with the interference protection that must be afforded to the LPTV stations participating in this pilot project. Second, we deal with the interference protection that pilot project stations must afford to all other stations that are entitled to protection.

23. Interference protection of a pilot project station will be limited to the analog TV protected contour of the underlying LPTV station. That underlying LPTV station authorization may be modified in accordance with the LPTV rules and procedures. When and if the LPTV rules are amended to allow digital LPTV authorizations, the underlying analog LPTV station may be converted to a digital LPTV authorization in accordance with those rules. Pilot project authorizations for digital power in excess of 10 percent of the underlying analog LPTV station power will not entitle the station to any additional interference protection. Similarly, booster station authorizations that may allow the pilot project station to provide service in areas beyond the underlying LPTV protected contour will not entitle the pilot project station to additional interference protection.

24. As requested, we clarify that a pilot project station is not limited to an effective radiated power that is 10 percent or less than that of the analog power of the associated LPTV station. A pilot project station will be assumed at the application stage to provide the required interference protection to other stations if it conforms to the 10 percent of the LPTV analog power criterion and any booster stations do not extend the analog LPTV authorized protected contour. Requests for greater pilot project power, up to the 15 kilowatt effective radiated power limit for UHF digital LPTV stations, or for boosters located within the analog LPTV protected contour extending the pilot project service beyond the analog protected contour, must include a showing that no interference is predicted to any other service that is entitled to protection. (The digital effective radiated power limit in the LPTV rules for VHF station is 300 watts (47 CFR 74.735(b)(1)). Pilot project booster stations may be located anywhere within the protected contour of the underlying analog LPTV authorization based on a showing of noninterference to protected stations. On this basis we will not prohibit a booster from extending service beyond the protected contour.

25. Paperwork Reduction Act Analysis . This Order on Reconsideration may contain either proposed or modified information collections. As part of our continuing effort to reduce paperwork burdens, we invite the general public to take this opportunity to comment on the information collections contained in this Order , as required by the Paperwork Reduction Act of 1996. Public and agency comments are due May 3, 2002. Comments should address: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) ways to enhance the quality, utility, and clarity of the information collected; and (c) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Judy Boley, Federal Communications Commission, 445 Twelfth Street, SW., Room C-1804, Washington, DC 20554, or via the Internet to jboley@fcc.gov and to Jeanette Thornton, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., Washington, DC 20503 or via the Internet to JThornto@omb.eop.gov .

26. Final Regulatory Flexibility Analysis . No regulatory flexibility analysis is required because the rules adopted in the Order and this Order on Reconsideration were adopted without notice and comment rule making.

27. Congressional Review Act . These rules, promulgated without notice and comment rule making, are not subject to the provisions of the Congressional Review Act.

28. Pursuant to the authority contained in sections 1, 2(a), 4(i), 7, and 336 of the Communications Act of 1934 as amended, 47 U.S.C. 1, 2(a), 4(i), 7 and 336, part 74 of the Commission's rules, 47 CFR part 74, is amended as set forth.

29. The rule amendments set forth shall be effective February 14, 2002 .

30. The petition for reconsideration filed by U.S. Interactive, L.L.C., is granted to the extent discussed herein, and otherwise is denied .

31. This proceeding is terminated .